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In: Math

Company C showed a profit of $1.3 million last year. The CEO of the company expects...

Company C showed a profit of $1.3 million last year. The CEO of the company expects the profit to decrease by 2% 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 $1.3 million.)
R(t) =  

1.3·(95100​)t

   million dollars per year

(b) Calculate the 5-year future value. (Round your answer to three decimal places.)
$  million

(c) Calculate the 5-year present value. (Round your answer to three decimal places.)
$  million

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Expert Solution

milcah answered 2 years ago
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