What price must he sell the entire acreage

Assignment Help Finance Basics
Reference no: EM132497757

About twenty thousand acres of swampland in the southern U.S. was purchased for $6,000,000. The purchaser intends to keep it for twenty years and then sell it for a profit. The purchaser speculates that he can get a 6% after-tax rate-of-return even though he estimates an average 2% annual inflation rate during that period. Suppose income taxes are 15% of capital gains. What price must he sell the entire acreage for at the end of twenty years to achieve his speculated rate of return?

Reference no: EM132497757

Questions Cloud

Describe the difference between chrematistics and economics : Describe the difference between Chrematistics and Economics in Aristotle's thought. How does Aristotle's disdain for Chrematistics relate to the notion of evil.
Compute current price of bond-katie pairy fruits inc : Katie Pairy Fruits Inc. has a $3,200 24-year bond outstanding with a nominal yield of 17 percent (coupon equals 17% × $3,200 = $544 per year).
Estimate the annual carbon emissions from the plant : What would be the problem in releasing SO2 to the atmosphere? Is sulfur dioxide a regulated priority pollutant? If yes, report the NAAQS?
Understanding of finance : Why is it important for persons who work in other areas in a business to have an understanding of finance?
What price must he sell the entire acreage : What price must he sell the entire acreage for at the end of twenty years to achieve his speculated rate of return?
What is the amount of the monthly repayment : You promise to repay the loan in 24 monthly repayments commencing today. If the effective annual interest
Determining the stock valuation problem : The English Corporation has a beta of 1.30x, the risk-free rate of interest is currently 9% and the required return on the market portfolio is 12%.
Discussion about esem principles : Discussion about ESEM principles. op-ed for your local newspaper talking about what you wish you'd learned in universityand offering
Manufacturing facility to produce radar detection systems : Defense Electronics Corporation is considering building an overseas manufacturing facility to produce radar detection systems. As a consultant to DEC

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd