Business, 08.11.2019 22:31 carmencc

One year ago, you paid $15,000 for an empty plot of land. today, you are considering developing it into a parking lot. it will cost you $50,000 today to turn this land into a parking lot. as a parking lot, you anticipate that it will generate $8,000 in revenue each year forever, starting one year from today. the required return for this project is 14% annually. assume that you have no other ideas for what to do with this land; if you don’t build the parking lot, it will not be used for anything else. also assume you will never sell this land. from a financial perspective, is turning this land into a parking lot today a good idea?

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One year ago, you paid $15,000 for an empty plot of land. today, you are considering developing it i...