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The asking price of an acre of farm land is currently $1,050 per acre. The current net cash flow is $65 per acre, the investor's
The asking price of an acre of farm land is currently $1,050 per acre. The current net cash flow is $65 per acre, the investor's nominal cost of capital is 8.5% and the planning horizon is 20 years. The inflation rate of current returns is 3% and land values are 2%.
A.Evaluate the profitability (NPV) of the investment assuming no taxes and no debt financing.
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