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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9.)show complete solution, final answer should be in two decimal only, i will automatically give upvote.

Transcribed Image Text:Consider the following investment in a piece of land. Purchase price 500,000 Annual maintenance:
5,000 Expected sale price after 8 years: 1,000,000. Determine a) The rate of return (to 1/100
percent) and b) What is the lowest sale price the investor should accept if she wishes to earn a
return of 10% after keeping the land for 10 years?
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