Answer: $299574.17
Step-by-step explanation:
From the question, we are given the information that a salt mine inherited will pay $25,000 per year for 25 years, with the first payment being made today. If the fair return on the mine is 7.5%, the amount that should be asked for it's to be sold goes thus:
Periodic amount = $25000
Return on mine = 7.5%
Number of years = 25
Selling amount will then be:
= 25000 + [-PV(7.50%,24,25000,0)]
= 25000 + [-PV(0.075,24,25000,0]
= $299574.17
=