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1. a.) (4) Prof. Shiell is considering buying a commercial warehouse which he will rent out to businesses for an annual profit of $48,000. But
1. a.) (4) Prof. Shiell is considering buying a commercial warehouse which he will rent out to businesses for an annual profit of $48,000. But there is a catch - due to an evil feature created by the engineers who designed it, the building is scheduled to explode into a useless heap of rubble at the end of the 18th year of operation. Prof. Shiell is aware of this feature and there is no way to prevent it. Thus, the profits will flow for 18 years only. Assuming a nominal interest rate of 3 percent and continuous compounding, what is the maximum that Prof. Shiell would be willing to pay for this warehouse? b.) (2) What would be the maximum amount Prof. Shiell would be willing to pay for the warehouse if he could de-activate the explosion feature
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