Question 7

If you purchase a parcel of land today for $25,000, and you expect it to appreciate 10 percent per year in value, how much will your land be worth 10 years from now assuming annual compounding?

Question 17

You are considering the purchase of a small income-producing property for $150,000 that is expected to produce the following net cash flows.

End of Year	Cash Flow
1	$50,000
2	$50,000
3	$50,000
4	$50,000

Assume your required internal rate of return on similar investments is 11 percent. What is the net present value of this investment opportunity? What is the going-in internal rate of return on this investment? Should you make the investment?