Question: An investor purchased a one-acre lot on the outskirts of a city for $9000 cash. Each year he paid $80 of property taxes. At the

An investor purchased a one-acre lot on the outskirts of a city for $9000 cash. Each year he paid $80 of property taxes. At the end of 4 years, he sold the lot. After deducting his selling expenses, the investor received $15,000. What rate of return did he receive on his investment?

Step by Step Solution

★★★★★

3.26 Rating (164 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

PW of Benefits PW of Cost 0 15000 PF i 4 9000 80 ... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Document Format (1 attachment)

Word file Icon

7-B-E-M (113).docx

120 KBs Word File

Students Have Also Explored These Related Economics Questions!

Q:

An investor purchased a 91-day, $100 000 T-bill on its issue date for $99 326.85. After holding it for 42 days, she sold the T-bill for a yield of 2.52%. (a) What was the original yield of the...

Q:

An investor purchased a 182-day, $100 000 T-bill on its issue date. It yielded 3.85%. The investor held the T-bill for 67 days, then sold it for $98 853.84. (a) What was the original price of the...

Q:

An office unit located on the outskirts of Edinburgh has recently been let to a major accountancy firm on a 10-year lease on FRI terms with no reviews at 220,000 p.a. which is considered to be the...

Q:

An investor purchased a one-acre lot on the outskirts of a city for $9000 cash. Each year he paid $80 of property taxes. At the end of 4 years, he sold the lot. After deducting his selling expenses,...

Q:

An investor bought a one-acre lot on the outskirts of a city for $9000 cash. Each year she paid $80 of property taxes. At the end of 4 years, she sold the lot for a net value of $15,000. What rate of...

Q:

an investor bought a one-acre lot on the outskirts of a city for $9000 cash. Each year she paid $80 of property taxes . At the end of 4 years, she lost the plot for a net value of $15,000. What rate...

Q:

An investor bought a one - acre lot on the outskirts of a city for $ 1 2 , 7 0 0 cash. Each year she paid $ 1 7 5 of property taxes. At the end of 7 years, she sold the lot for a net value of $ 2 5 ,...

Q:

An investor bought a one - acre lot on the outskirts of a city for $ 1 2 , 7 0 0 cash. Each year she paid $ 1 7 5 of property taxes. At the end of 7 years, she sold the lot for a net value of $ 2 5 ,...

Q:

An investor bought a one - acre lot on the outskirts of a city for $ 1 2 , 7 0 0 cash. Each year she paid $ 1 7 5 of property taxes. At the end of 7 years, she sold the lot for a net value of $ 2 5 ,...

Q:

An investor bought a one-acre lot on the outskirts of a city for $12,700cash. Each year she paid $175 of property taxes . At the end of 7 years, she lost the plot for a net value of $25,000. What...

Q:

Zeina & Lody have decided to constitute a partnership company with a capital of 150,000L.L. Lody has paid 50,000 L.L.in cash. Zeina liberates her contribution by presenting the items of her balance...

Q:

In Y6, Aylmer Inc has a building that is considered to be held for sale. The original cost of the building was $500,000 and has an estimated useful life of 25 years. How much depreciation should...

Q:

If the value of an unlevered firm is $ 1 2 million, what is the value of the same firm with some debt financing? Assume MM with taxes holds. Question 5 Answer a . $ 1 2 million b . $ 1 3 million c ....

Q:

[The following information applies to the questions displayed below.] Trey has two dependents, his daughters, ages 14 and 17, at year-end. Trey files a joint return with his wife. What amount of...

Q:

This year Lloyd, a single taxpayer, estimates that his tax liability will be $10,150. Last year, his total tax liability was $15,100. He estimates that his tax withholding from his employer will be...

Q:

Olga is married and files a joint tax return with her husband. What amount of AMT exemption may she deduct under each of the following alternative circumstances? Exhibit 8-5. (Leave no answer blank....

Q:

(a) How much work is done to move a 1.80 X 10 3 -kg Chevrolet Tahoe from rest to 35.2 m/s on a level road? (b) If this takes place over a distance of 251 m, what is the average net force applied to...

Q:

Harrison Forklift's pension expense includes a service cost of $19 million. Harrison began the year with a pension liability of $46 million (underfunded pension plan). 1. Interest cost, $7; expected...

Q:

Why would it be better to lean against credit-driven bubbles and clean after other types of asset bubbles crash?

Q:

The maintenance and operation (M&O) cost of front-end loaders working under harsh environmental conditions tends to increase by a constant $1200 per year for the first 5 years of operation. For a...

Q:

You work for Midstates Solar Power. A manager asked you to determine which of the following two machines will have the lower (a) Capital recovery (b) Equivalent annual total cost. Machine Semi2 has a...

Q:

The State of Chiapas, Mexico, decided to fund a program for literacy. The first cost is $200,000 now, and an update budget of $100,000 every 7 years forever is requested. Determine the perpetual...

Q:

Calculate the perpetual equivalent annual cost (years 1 through infinity) of $5 million in year 0, $2 million in year 10, and $100,000 in years 11 through infinity. Use an interest rate of 10% per...

Q:

A Pennsylvania coal mining operation has installed an in-shaft monitoring system for oxygen tank and gear readiness for emergencies. Based on maintenance patterns for previous systems, there are no...

Q:

What is the IRR of the following set of cash flows? Year Cash Flow 0 GN- 12,022 5.700 6,700 5,100 2 3 Multiple Choice 21.34% 22.22% 21.78% 22.87% 20.69%