Determine the present value of the continuous cash flow

Reference no: EM131965615

Problem

The productivity of a certain piece of manufacturing equipment is expected to decline at a constant rate with age from an initial value of $500,000 at time 0, to a final value of $40,000 at the end of year 3. If interest is compounded continuously at a nominal annual rate of 11%, determine the present value of this continuous cash flow.

Reference no: EM131965615

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