Washington-Pacific (W-P) invests $3 million to buy a tract of land and plant some young pine trees. The trees can be harvested in 11 years, at which time W-P plans to sell the forest at an expected price of $6 million. What is W-P's expected rate of return? Do not round intermediate calculations. Round your answer to two decimal places.
$6 mil = $3 mil * (1 + r)11
2 = (1 + r)11
1.0650 = 1 + r
r = 0.0650
r = 6.50%
Washington-Pacific (W-P) invests $3 million to buy a tract of land and plant some young pine trees. The trees can be har...
Washington-Pacific (W-P) invests $5 million to buy a tract of land and plant some young pine trees. The trees can be harvested in 11 years, at which time W-P plans to sell the forest at an expected price of $10 million. What is W-P's expected rate of return? Round your answer to two decimal places.
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