Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A 5 7 - year - old couple is considering opening a business of their own. They will either purchase an established Gift and Card

A 57-year-old couple is considering opening a business of their own. They will either purchase an established Gift and Card Shoppe or open a new Wine Boutique. The Gift
Shoppe has a continuous income stream with an annual rate of flow at time t given by
G(t)=37,400(dollars per year).
The Wine Boutique has a continuous income stream with a projected annual rate of flow at time t given by
W(t)=21,500e0.08t,(dollars per year).
The initial investment is the same for both businesses, and money is worth 10% compounded continuously. Find the present value of each business over the next 8 years (until
the couple reaches age 65) to see which is the better buy. (Round your answers to the nearest dollar.)
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Foundations Of Personal Finance

Authors: Sally R. Campbell, Robert L. Dansby

9th Edition

1619603578, 9781619603578

More Books

Students also viewed these Finance questions

Question

What are the potential limitations of group discussion?

Answered: 1 week ago