Calculate the per acre pv of this payment stream

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Reference no: EM131933284

Problem

You have the option of selling a permanent conservation easement to the MN Board of Soil and Water Resources. Your land consists of tillable land that will be restored to wetlands and grassland once the easement is conveyed to the state. You will receive 15 annual payments of $150/acre/year (one immediately after conveying the easement; followed by 14 annual payments). One year after the last annual payment is made, you will receive a single payment of $750/acre. If the opportunity cost of your capital is 3.5%, calculate the per acre PV of this payment stream.

Reference no: EM131933284

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