Intel Corporation is a leading manufacturer of integrated circuits. In 2011, Intel generated profits at a continuous rate of 34.6 billion dollars per year based on a total revenue of 54 billion dollars. Assume the interest rate was 6% per year compounded continuously.
(a) What was the present value of Intel’s profits over the 2011 one-year time period?
(b) What was the value at the end of the year of Intel’s profits over the 2011 one-year time period?