Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Answer . a, b, and c Find the present value of a continuous income stream F(t) = 20 + 3t, where t is in years

image text in transcribed

Answer . a, b, and c

image text in transcribedimage text in transcribedimage text in transcribed
Find the present value of a continuous income stream F(t) = 20 + 3t, where t is in years and F is in thousands of dollars per year, for 10 years, if money can earn 2.2% annual interest, compounded continuously. Present value = thousand dollars.A company is considering expanding their production capabilities with a new machine that costs $39,000 and has a projected lifespan of 9 years. They estimate the increased production will provide a constant $5,000 per year of additional income. Money can earn 1.9% per year, compounded continuously. Should the company buy the machine? Yes, the present value of the machine is greater than the cost by v over the life of the machineFind the accumulated present value of an investment over a 6 year period if there is a continuous money flow of $10,000 per year and the interest rate is 1.6% compounded continuously

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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

Microeconomics and Behavior

Authors: Robert Frank

9th edition

9780077723750, 78021693, 77723759, 978-0078021695

Students also viewed these Economics questions