industrial economics
1. Compute the present value of a cash flow that follows the pattern below, with 10%
interest compounded continuously.
Pt
22
13
6 ._._._._._._._..é._._._._._._._.
O 9 17
2. Suppose a cash flow increases continuously according to the function below, from year 0
to year 20. Find the present value of this cash flow stream under continuous
compounding at r = 10%.
5‘
[7’ = 25 * (1 _e-0.21)