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You have purchased 10,000 acres which currently generates $160 per acre per year from a hunting lease. This lease costs you $12 per acre
You have purchased 10,000 acres which currently generates $160 per acre per year from a hunting lease. This lease costs you $12 per acre per year in insurance coverage and $550 total per year in administrative costs to oversee the lease. What is the present value of your cash flow from this investment over the next 10 years? Assume that the required rate of return is 3%.
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