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
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
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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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