4-6. Uncle Wilbur's trout ranch is now for sale for $40,000. Annual property taxes, maintenance, supplies, and so on are estimated to continue to be $3,000 per year. Revenues from the ranch are expected to be $10,000 next year and then to decline by $500 per year thereafter through the tenth year, If you bought the ranch, you would plan to keep it for only 5 years and at that time to sell it for the value of the land, which is $15,000. If your desired annual rate of return is 12%, should you become a trout rancher? Use the PW method.
4-6. Uncle Wilbur's trout ranch is now for sale for $40,000. Annual property taxes, maintenance, supplies, and so on are estimated to continue to be $3,000 per year. Revenues from the ranch are expected to be $10,000 next year and then to decline by $500 per year thereafter through the tenth year, If you bought the ranch, you would plan to keep it for only 5 years and at that time to sell it for the value of the land, which is $15,000. If your desired annual rate of return is 12%, should you become a trout rancher? Use the PW method.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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solve this question step by step but not on excel
Transcribed Image Text:4-6. Uncle Wilbur's trout ranch is now for sale for
$40,000. Annual property taxes, maintenance,
supplies, and so on are estimated to continue
to be $3,000 per year. Revenues from the ranch
are expected to be $10,000 next year and then
to decline by $500 per year thereafter through
the tenth year. If you bought the ranch, you
would plan to keep it for only 5 years and at that
time to sell it for the value of the land, which is
$15,000. If your desired annual rate of return is
12%, should you become a trout rancher? Use
the PW method.
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