A mining property is offeredfor sale for P5.7 M. On thebasis of estimated production,an annual return of P800,000is foreseen for a period of 10years. After 10 years, theproperty will be worthless.What annual rate of return is inprospect?

Cost of property = P5,700,000 Annual return = P800,000 Period = 10 Years

Answered: A mining property is offered for sale…

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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A mining property is offered for sale for P5.7 M. On the basis of estimated production, an annual return of P800,000 is foreseen for a period of 10 years. After 10 years, the property will be worthless. What annual rate of return is in prospect?