A patch of land adjacent to the proposed international airport is likely to increase in value. The cost of land now is INR 8,00,000 and is expected to

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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Economics

A patch of land adjacent to the proposed international airport is likely to increase in value. The cost of land now is INR 8,00,000 and is expected to be worth INR 15,00,000 within 5 years. During this period it can be rented for small scale industry at INR 15000 per year. Annual taxes are presently is INR 8500 and likely to remain constant. What rate of return will be earned on the investment if the estimates are accurate? Draw cash flow diagram.

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