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You are considering purchasing a piece of land. According to your analysis, if you plant vegetables, it will produce a cash flow of $4,000 starting
You are considering purchasing a piece of land. According to your analysis, if you plant vegetables, it will produce a cash flow of $4,000 starting at the end of year 5 and growing at an annual rate of 3% in perpetuity. If the appropriate discount rate is 10%, what is the most you should pay for this land? Round to the nearest cent. [Hint: Similar to Practice Test 2 Q18, except that this is a growing perpetuity
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