Decided to lease the mineral rights to a mining company

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An engineering company in Virginia that owns 250 acres of valuable land has decided to lease the mineral rights to a mining company. The primary objective is to obtain long term income to finance ongoing projects 5 and 15 years from the present time. The engineering company makes a proposal to the mining company that it pay $50,000 per year for 20 years beginning 1 year from now, plus $200,000 five years from now and $300,000 fifteen years from now. If the mining company wants to pay off its lease immediately, how much should it pay now if the investment should make 10% per year?

Reference no: EM131012844

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