Question: Suppose there are three farmers (Farmer A and Farmer B and Farmer C). The current zoning

allows the land to be used for any purpose. Farmer A has chosen Pig Farming. A Pig Farm will earn $50,000 profit, every year, forever.

1. Assume the interest rate is 10% per year. Using a present value equation--
   \[PV=\frac{Y}{{{\left( 1+r \right)}^{n}}}\]
   Wat is the Pig Farm worth?
2. Suppose the next best use of Farmer A’s property is residential, where it could earn $20,000 per year. What is the minimum one-time payment Farmer A would accept to agree to restrict his land for residential use forever?

Price: $2.99

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Deliverable: Word Document