2.57. Dickens Corp wants to buy a 100-acre tract of land. The owner will sell it for a cash price of $175,000, but Dickens offered to pay for the land in five annual installments of $40,000 each, the first one is due at the end of one year. Find the cost of capital for Dickens the two prices to be equivalent.

2.57. Dickens Corp wants to buy a 100-acre tract of land. The owner will sell it for a cash price of $175,000, but Dickens offered to pay for the land in five annual installments of $40,000 each, the first one is due at the end of one year. Find the cost of capital for Dickens the two prices to be equivalent.

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 22P: Washington-Pacific (W-P) invested $4 million to buy a tract of land and plant some young pine trees....

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