Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Company C showed a profit of $1.4 million last year. The CEO of the company expects the profit to decrease by 7% each year over the next five years and the profits will be continuously invested in an
account bearing a 4.75% APR compounded continuously
(a) Write the flow rate, R, of the income stream. (Let t represent the number of years after the company showed a profit of $1.4 million)
R(E)-
million dollars per year
(b) Calculate the 5-year future value. (Round your answer to three decimal places)
S
million
(e) Calculate the 5-year present value. (Round your answer to three decimal places.)
million
S
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Transcribed Image Text:Company C showed a profit of $1.4 million last year. The CEO of the company expects the profit to decrease by 7% each year over the next five years and the profits will be continuously invested in an account bearing a 4.75% APR compounded continuously (a) Write the flow rate, R, of the income stream. (Let t represent the number of years after the company showed a profit of $1.4 million) R(E)- million dollars per year (b) Calculate the 5-year future value. (Round your answer to three decimal places) S million (e) Calculate the 5-year present value. (Round your answer to three decimal places.) million S
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