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Principles of Economics 2e
2nd Edition
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Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
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Engineering Econ HW2 Q3
![3. A firm paid $160,000 for a building site two years ago. It is now worth $180,000, and the firm's
plans have changed so that no building is planned. The firm estimates that the land will be
worth $240,000 in four years. If the firm's interest rate is 8%, what should it do? Should it sell
the building now or in four years?](https://content.bartleby.com/qna-images/question/43c6c60e-7312-49f6-8756-8967bc0098ca/2f6a0028-f561-4120-a39a-f50b18cdfa43/7k67d4t_thumbnail.jpeg)
Transcribed Image Text:3. A firm paid $160,000 for a building site two years ago. It is now worth $180,000, and the firm's
plans have changed so that no building is planned. The firm estimates that the land will be
worth $240,000 in four years. If the firm's interest rate is 8%, what should it do? Should it sell
the building now or in four years?
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