What is the firm’s expected rate of return?

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Huges Ellison Inc. invests $18 million to buy a tract of land and plants some young pine trees. The trees can be harvested in 6 years, at which time the firm plans to sell the forest at an expected price of $36 million. What is the firm’s expected rate of return?

a. 9.05%

b. 10.77%

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c. 11.49%

d. 12.25%

 

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