Farmer Smith has some ranch land. He can buy a heard of young steers for $10,000, graze them on his ranch, and sell them after 3 years for $40,000. He can then immediately buy another herd of young steers, graze them for 3 years, etc. Assume r=10%. What is the value of the land as a cattle ranch? (Choose the closest answer.) O $8,063 O $80,630 O $30,000 O $20,050

Farmer Smith has some ranch land. He can buy a heard of young steers for $10,000, graze them on his ranch, and sell them after 3 years for $40,000. He can then immediately buy another herd of young steers, graze them for 3 years, etc. Assume r=10%. What is the value of the land as a cattle ranch? (Choose the closest answer.) O $8,063 O $80,630 O $30,000 O $20,050

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter2: The Domestic And International Financial Marketplace

Section: Chapter Questions

Problem 8P

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