You currently lease land to graze livestock. Your lease is up this year, and the landowner has
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Question:
You currently lease land to graze livestock. Your lease is up this year, and the landowner has offered you a year contract to lease the land for $ac for years, with the first right of refusal to buy it at the end of years for $ac You want to counter offer to see if the landowner is willing to sell the land to you today instead of the lease agreement. The landowner values all investments at a interest rate. How much would you have to offer to purchase the land today for the landowner to accept your offer?
Note: This assumes the landowner is indifferent to selling today vs selling years from now.
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