Question: Problem 6 [ Hint: Unit 5 ] A company expects its rate of annual income during the next three years to grow exponentially at
Problem Hint: Unit A company expects its rate of annual income during the next three years to grow exponentially at per year as follows, which is lower than the market rate of interest of : ft e t The company would like you to confirm that the accumulated amount of money flow at the end of three years will cover the cost of the machine this amount includes the machine cost and interest payments of $ The company is interested in expanding its business and would like to know if there are sufficient earnings to purchase a new machine outright without borrowing funds at $ Similarly, find the accumulated amount of money flow that would exist during the next year period. You predict the following: The new machine will boost annual income to $ and grow exponentially at per year for years through An expected market rate of interest of during this time frame. Please advise.
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