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Pavel [41]
2 years ago
12

You just purchased a parcel of land for $10,000. if you expect a 12% annual rate of return on your investment, how much will you

sell the land for in 10 years? note. due to rounding and method of calculation, your answer might vary slightly. choose the closest answer.
Business
1 answer:
Sunny_sXe [5.5K]2 years ago
4 0

I guess the closest answer is $31,060.

If you purchased a parcel of land for $10,000. If you expect a 12% annual rate of return on your investment. Therefore you can sell the land for in 10 years in $31,060.

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Seattle Inc. identifies an investment opportunity, which will yield cash flows of $30,000 per year in Years 1 through 4, $35,000
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the payback period = 4.86 years

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Seattle's cash flows are as following:

Year                Cash flow                         Accumulated cash flows

0                     -$150,000                                -$150,000

1                         $30,000                                -$120,000

2                        $30,000                                 -$90,000

3                        $30,000                                 -$60,000

4                        $30,000                                 -$30,000

5                        $35,000                                    $5,000

6                        $35,000                                  $40,000

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The payback period is between year 4 and 5:

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