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5. Suppose that the future value of an income stream is given by 12(1.025 ) (0.049 (8-t) dt million dollars. Based on this formula, (a)
5. Suppose that the future value of an income stream is given by 12(1.025 ) (0.049 (8-t) dt million dollars. Based on this formula, (a) What is the interest rate (APR)? (b) What is the time period T? (c) What is the flow rate of the income stream? 6. Company Z showed a profit of $1.5 billion this year. The CEO of the company expects the profit to increase by 2.5% per year over the next seven years and the profits will be continuously invested in an account bearing a 6.1% APR compounded continuously. Calculate the seven-year future value of this income stream. 7. Company Y has profits of 1.5 billion dollars this year, and expects profits to increase by 0.0375 billion dollars per year over the next seven years and the profits will be continuously invested in an account bearing a 6.1% APR compounded continuously. Calculate the seven-year future value of this income stream. 8. Company W has profits of $1.5 billion dollars this year and expects profits to be constant for the next seven years. The profits will be continuously invested in an account bearing a 6.1% APR compounded continuously. Calculate the seven-year present value of this income stream
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