Question: Create an NPV model in excel for a land subdivision with the following assumptions: - 30 lots at $50,000 per lot, increasing at 3% per

Create an NPV model in excel for a land subdivision with the following assumptions:

- 30 lots at $50,000 per lot, increasing at 3% per year

- Absorption rate of 10 lots per year

- Costs of marketing 5% of gross revenues

- IRR of 15%

1. What is the justified acquisition cost of the land?

2. What would be the justified acquisition cost of the land if the absorption changed from 3 to 5

years?

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