1. Assume a potential land investor is evaluating the profitability of an anticipated land investment that has an asking price of $2,000 per acre and a current net cash flow of $120 per acre. Further assume the investor will pay cash, plans on holding the property for 10 years and has a 5% cost of capital.

Is this investment profitable?,Evaluate the investment if there is an anticipated inflation rate of 4%. Given your answers in parts above, and assuming the same conditions exist, except that land values are expected to grow at a 5% annual rate, evaluate the profitability of the investment? You must show your work