The following data are given

about a tract of farmland.

Current rental values on

land are about $120 per acre.

Real estate taxes are $20 per acre.

The general inflation rate

is 4 percent per year.

The long-term cost of

capital is 5 percent.

The real growth rate of returns fr

om the land is 2 percent per year.

Determine the following:

a)

The land's current market value

b)

The total nominal rate of return

c)

The nominal current rate of return

d)

The land's value one and two years from now.