b. Consider a vacant acre of land that rents for $500,000 per year after taxes. Assume this rent will hold in the future. The discount rate is 7%. What should be the market value of this land for a 5-year tenure. c. Supposed that you were promised an unlimited tenure for the same land as in (b). Compute the market value of this land.

b. Consider a vacant acre of land that rents for $500,000 per year after taxes. Assume this rent will hold in the future. The discount rate is 7%. What should be the market value of this land for a 5-year tenure. c. Supposed that you were promised an unlimited tenure for the same land as in (b). Compute the market value of this land.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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