Capital Outlay. Chrome solutions determines that the rate of revenue coming in from a new machine is R 1 ( t ) = 8000 − 100 t , in dollars per year, for 8 yr, after which the machine will be replaced. The company learns that an alternative machine will yield revenue at a rate of R 2 ( t ) = 7600 − 85 t . a. Find the accumulated present value of the income stream from each machine at an interest rate of 5.8%, compounded continuously. b. Find the difference in the accumulated present values.
Capital Outlay. Chrome solutions determines that the rate of revenue coming in from a new machine is R 1 ( t ) = 8000 − 100 t , in dollars per year, for 8 yr, after which the machine will be replaced. The company learns that an alternative machine will yield revenue at a rate of R 2 ( t ) = 7600 − 85 t . a. Find the accumulated present value of the income stream from each machine at an interest rate of 5.8%, compounded continuously. b. Find the difference in the accumulated present values.
Capital Outlay. Chrome solutions determines that the rate of revenue coming in from a new machine is
R
1
(
t
)
=
8000
−
100
t
,
in dollars per year, for 8 yr, after which the machine will be replaced. The company learns that an alternative machine will yield revenue at a rate of
R
2
(
t
)
=
7600
−
85
t
.
a. Find the accumulated present value of the income stream from each machine at an interest rate of 5.8%, compounded continuously.
b. Find the difference in the accumulated present values.
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