A56-year-old couple is considering opening a business of their own. they will either purchase an established gift and card shoppe or open a new wine boutique. the gift shoppe has a continuous income stream with an annual rate of flow at time t given by g(t) = 39,700 (dollars per year). the wine boutique has a continuous income stream with a projected annual rate of flow at time t given by w(t) = 20,500e0.08t (dollars per year). the initial investment is the same for both businesses, and money is worth 10% compounded continuously.

find the present value of each business over the next 9 years (until the couple reaches age 65) to see which is the better buy. (round your answers to the nearest dollar.) gift shoppe $ wine boutique $

If a firm plans to issue new stock, flotation costs (investment bankers' fees) should not be ignored. there are two approaches to use to account for flotation costs. the first approach is to add the sum of flotation costs for the debt, preferred, and common stock and add them to the initial investment cost. because the investment cost is increased, the project's expected return is reduced so it may not meet the firm's hurdle rate for acceptance of the project. the second approach involves adjusting the cost of common equity as follows: . the difference between the flotation-adjusted cost of equity and the cost of equity calculated without the flotation adjustment represents the flotation cost adjustment. quantitative problem: barton industries expects next year's annual dividend, d1, to be $1.90 and it expects dividends to grow at a constant rate g = 4.3%. the firm's current common stock price, p0, is $22.00. if it needs to issue new common stock, the firm will encounter a 6% flotation cost, f. assume that the cost of equity calculated without the flotation adjustment is 12% and the cost of old common equity is 11.5%. what is the flotation cost adjustment that must be added to its cost of retaine