The CEO has a chance to buy a vacant lot for $1.0 million. He will use it as a parking lot to cover taxes and other costs except interest. He believes it can be sold for $2 million in five years when the real estate market recovers. The company's cost of capital is 10%. Will the deal make the company richer of poorer? By how much? (you can use the present value function in Excel or PV tables)© BrainMass Inc. brainmass.com October 1, 2020, 9:21 pm ad1c9bdddf
Please help with the following problem involving cost of capital.