Question: You are thinking about purchasing some vacant land. You expect to be able to sell the land ten years from now for $500,000. a. What

You are thinking about purchasing some vacant land. You expect to be able to sell the land ten years from now for $500,000.

a. What is the most you can pay for the land today if your required rate of return is 15%?

b. What is the expected (annualized) return on this investment over the 10-year holding period if you purchase the land for $170,000?

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