A firm spends $20,000 per year for supplies. The supplies are consumed uniformly and continuously during the year.

1. a) What is the discrete cash flow equivalent at the beginning of the year for the supply cost if the firms time value of money is equivalent to 10% compounded continuously?

2. b) How would your answer to part a) change if the firms interest rate was 10% compounded quarterly?

3. c) Consider a uniform series of discrete cash flows that occur at the beginning of every 6-month period, which is equivalent to the supply costs of this firm over 5 years. Calculate the size of these cash flows considering an interest rate of 10% compounded continuously.