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a. Find the present value of the net revenues over the first five(5) rotations. b. Find the present value of an infinite number of rotations.

a. Find the present value of the net revenues over the first five(5) rotations. b. Find the present value of an infinite number of rotations.

Essentials Of Investments
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
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A crop rotation is grown on a particular tract of land. The producer's best estimate of real annual expected returns per acre are

$50,$−10,$40,−$5,$50,$−10,$40,−$5,…...

. Interest rates are

AR=

0.05 or

5%

(real). a. Find the present value of the net revenues over the first five(5) rotations. b. Find the present value of an infinite number of rotations.

3. A crop rotation is grown on a particular tract of land. The producer's best estimate of real annual Interest rates are AR = expected returns per acre are $50, $-10, $40, -55, $50, $-10, $40,-$5, 0.05 or 5% (real). **** a. Find the present value of the net revenues over the first five (5) rotations. b. Find the present value of an infinite number of rotations.
Transcribed Image Text:3. A crop rotation is grown on a particular tract of land. The producer's best estimate of real annual Interest rates are AR = expected returns per acre are $50, $-10, $40, -55, $50, $-10, $40,-$5, 0.05 or 5% (real). **** a. Find the present value of the net revenues over the first five (5) rotations. b. Find the present value of an infinite number of rotations.
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