2. When net cashflow occurs continuously, say at rate (t) at time t, then the equation of value for a yield rate (force of interest) for the transaction over the period from 0 to n is " (t) . e-ordt = 0 The overall equation of value for yield rate is C, e e-8., + " (t) . e* dt = 0 s=0 Suppose a company is marketing a new product. The production and marketing process involves a startup cost N$ 1 000 000 and continuing cost of N$ 200 000 per year for 5 years, paid continuously. It is forecast that revenue from the product will begin one year after startup, and will continue until the end of the original 5-year production process. Revenue (which will be received continuously) is estimated to start at a rate of N$ 500 000 per year and increase linearly and continuously) over a two-year period to a rate of N$ 1 000 000 per year at the end of 3rd year, and then decrease to a rate of N$ 200 000 per year at the end of the 5th year. Solve for the yield rate & earned by the company over the 5-year period. 2. When net cashflow occurs continuously, say at rate (t) at time t, then the equation of value for a yield rate (force of interest) for the transaction over the period from 0 to n is " (t) . e-ordt = 0 The overall equation of value for yield rate is C, e e-8., + " (t) . e* dt = 0 s=0 Suppose a company is marketing a new product. The production and marketing process involves a startup cost N$ 1 000 000 and continuing cost of N$ 200 000 per year for 5 years, paid continuously. It is forecast that revenue from the product will begin one year after startup, and will continue until the end of the original 5-year production process. Revenue (which will be received continuously) is estimated to start at a rate of N$ 500 000 per year and increase linearly and continuously) over a two-year period to a rate of N$ 1 000 000 per year at the end of 3rd year, and then decrease to a rate of N$ 200 000 per year at the end of the 5th year. Solve for the yield rate & earned by the company over the 5-year period