Dickens Corp wants to buy a 100-acre tract of land. The owner will sell it for a cash price of $175,000, but Dickens offered to pay for the land in five annual installments of $40,000 each, the first one is due at the end of one year. Find the cost of capital for Dickens the two prices to be equivalent.
Dickens Corp wants to buy a 100-acre tract of land. The owner will sell it for a cash price of $175,000, but Dickens offered to pay for the land in five annual installments of $40,000 each, the first one is due at the end of one year. Find the cost of capital for Dickens the two prices to be equivalent.
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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Dickens Corp wants to buy a 100-acre tract of land. The owner will sell it for a
cash price of $175,000, but Dickens offered to pay for the land in five annual installments of $40,000 each, the first one is due at the end of one year. Find the cost of capital for Dickens the two prices to be equivalent.
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