What is the present value of the investment in given case

Reference no: EM132062792

Question: You purchased bare land for $500 per acre as an investment to supplement your retirement income. After three years, you plan to reforest the property at a cost of $400 per acre. You estimate your income from selective timber harvesting will be $5,000 per acre beginning 25 years after the trees are planted and occurring every 10 years thereafter in perpetuity. You have annual property taxes of $2 per acre starting next year. What is the present value of this investment, assuming a 4 percent discount rate?

Reference no: EM132062792

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