Suppose That a Vending Machine Company Is Considering Selling Some

question 337

Multiple Choice

Suppose that a vending machine company is considering selling some of its machines. Suppose further that the income from these particular machines is a continuous stream with an annual rate of flow at time t given by Find the present value and future value of the machines over the next 3 years if the money is worth 11% compounded continuously. Round answers to the nearest dollar. ​

• A) PV = $1,893 FV = $2,633
• B) ​PV = $1,893 FV = $2,349
• C) PV = $1,689 FV = $2,349
• D) PV = $1,689 FV = $2,633
• E) PV = $2,364 FV = $2,633

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Definitions:

Treasury Stock

Shares that were once issued and outstanding but were later bought back by the company, reducing the amount of outstanding stock on the open market.

Cash Dividend

A payout from a corporation's profits, determined by its board of directors, provided to a specific group of its stockholders as cash.

Authorized Shares

The maximum number of shares that a corporation is legally permitted to issue, as outlined in its articles of incorporation.

Noncumulative

Pertains to certain preferential shares or rights that do not have the feature of accumulating unpaid dividends or benefits, contrasting with cumulative counterparts.