Business, 16.07.2019 20:20 Fireburntbudder

Mr. agirich has the opportunity to purchase some farm land at $2,000/acre. he expects that real land prices will increase at 4% per year and inflation will be 3%. his pretax risk adjusted discount rate is 14%. assume that the land will be sold in 10 years and the marginal tax rate is 23%. the effective interest rate on land loans is 5%.
calculate the after tax risk adjusted discount rate. calculate the present value of the after tax terminal value. what is the approximate maximum bid price for this land?

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Mr. agirich has the opportunity to purchase some farm land at $2,000/acre. he expects that real land...

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