Q1(d).You find there is a vacant piece of land next to the apartment building that's for sale for $4 million.Your business partner suggests you buy and hold the land for four years and sell it to a developer

Assume there are no direct expenses associated with holding the land and that you expect to sell it for $6.1 million four years from today.

Assuming you can only pursue one of the two investments discussed,which project would you undertake?

Option #1: The Apartment Building

Option #2: The Vacant Land

Explain your reasoningby discussing the part of the NPV Rule for Making Investment Decisions that's relevant to this situation and how it informs your decision.

Answer rating: 100% (QA)

To determine which investment option to pursue we can analyze the Net Present Value NPV rule for making investment decisions The NPV rule compares the ... View the full answer