Question: One year ago, you paid $27,400 for an empty plot of land. Today, you are considering developing it into a parking lot. It will cost

One year ago, you paid $27,400 for an empty plot of land. Today, you are considering developing it into a parking lot. It will cost you $50,000 today to turn this land into a parking lot. As a parking lot, you anticipate that it will generate $10,000 in revenue each year forever, starting one year from today. The required return for this project is 14% annually. Assume that you have no other ideas for what to do with this land; if you dont build the parking lot, it will not be used for anything else. Also assume you will never sell this land. From a financial perspective, is turning this land into a parking lot today a good idea?

Yes

c-	Cannot be determined

d-	No answer text provided.

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