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Present Value The board of directors of a corporation is calculating the price to pay for a business that is forecast to yield a continuous flow of profit of $500,000 per year. The money will earn a n

Present Value The board of directors of a corporation is calculating the price to pay for a business that is forecast to yield a continuous flow of profit of $500,000 per year. The money will earn a nominal rate of 5% per year compounded continuously. The present value of the business for  years is

Present value 

(a) Find the present value of the business for 20 years.

(b) Find the present value of the business in perpetuity (forever).

 

Jul 26 2021 View more View Less

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