You own 500 acres you lease to your neighbors for $200 / acre. You are looking to make a large investment and need a lot of cash. Your land is your only asset that you could sell to get cash.

But you do not like selling land. Instead, you contact an agency that offers immediate one-off cash transfer in return for the right for a percent of your cash rent income. You offer to the agency 25% of your

cash rent income over the next 15 years. If they believe that cash rent income will grow at the rate of 3% per year, what is the most money they might offer you in return for this stream of payments?

Use the discount rate of 5%.