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Decision-Making. A group of entrepreneurs is considering the purchase of a fast-food franchise. Franchise A predicts that it will bring in a constant revenue stream of $120,000 per year for 8 yr. Franchise B predicts that it will bring in a constant revenue steam of $112,000 per year for 10 yr. Based on a comparison of accumulated present values, which franchise is the better buy, assuming the interest rate is 5.4%, compounded continuously, and both franchises have the same purchase price?
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CALCULUS+ITS APPLICATIONS
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