LaRosa Machine Shop (LMS) is studying where to locate its tool bin facility on the shop floor. The locations of the five production stations appear in figure shown below.

In an attempt to be fair to the workers in each of the production stations, management has decided to try to find the position of the tool bin that would minimize the sum of the distances from the tool bin to the five production stations. We define the following decision variables:

X = horizontal location of the tool bin

Y = vertical location of the tool bin

We may measure the straight line distance from a station to the tool bin located at (X,Y) by using Euclidean (straight-line) distance. For example, the distance from fabrication located at the coordinates (1,4) to the tool bin located at the coordinates (X,Y) is given by .

Problem 7-17 Comparing Traditional and Activity-Based Product Margins [LO7-1, LO7-3, LO7-4, LO7-5]

Smoky Mountain Corporation makes two types of hiking boots—the Xtreme and the Pathfinder. Data concerning these two product lines appear below:

The company has a traditional costing system in which manufacturing overhead is applied to units based on direct labor-hours. Data concerning manufacturing overhead and direct labor-hours for the upcoming year appear below:

Required:

1. Compute the product margins for the Xtreme and the Pathfinder products under the company’s traditional costing system.

2. The company is considering replacing its traditional costing system with an activity-based costing system that would assign its manufacturing overhead to the following four activity cost pools (the Other cost pool includes organization-sustaining costs and idle capacity costs):

Compute the product margins for the Xtreme and the Pathfinder products under the activity-based costing system.

3. Prepare a quantitative comparison of the traditional and activity-based cost assignments.

Valuing Bonds                                                 

Q1.   Suppose a 20-year, $1000 par value bond with an annual fixed 5% coupon rate (coupons paid semiannually, as are most bonds) is trading for a price of $1065.48.

a.   What is the bond’s yield to maturity (expressed as an APR with semiannual compounding)?

b.   If this bond’s yield to maturity or YTM changes to 4% APR, what will the bond’s new price?  What is this bond’s new price if the YTM changes to 5%?

Q2.   Understanding what maturity risk means for bonds is very important.  Complete the following table by calculating the new bond prices and then the % price change that results for the two bonds given below.  For example, in the table if YTMs go up 1 percentage point (also known as 100 basis points or bp) on the short-term bond, that means that the YTM would go from 3% to 4%.  Then calculate the new price at a YTM of 4% and then calculate the % change in price from today's price of $1,000 to the new price.

Short term bond:  Face value of $1,000 with a fixed annual coupon rate of 3% with semi-annual payments, and a maturity in 2 years.  Assume that today's YTM on a 2 year bond is 3% so therefore today's price is $1,000.

Long term bond:  Face value of $1,000 with a fixed annual coupon rate of 3% with semi-annual payments, and a maturity in 30 years.  Assume that today's YTM on a 30 year bond is 3% so therefore today's price is $1,000.

this is all the data that was provided, as it is.

The solution should be written in Java.

Your POSmain program should take three file names from command line arguments. The first file contains a list of products and their prices; the second and third files are lists of items in two shopping carts of two customers. The POSmain program should first read the price file, then read each of the cart files to load a list of items in a shopping cart and store them in a ShoppingCart objects. The price file may contain a variable number of products and the cart files may contain a variable number of items.
POSmain then will create a CashRegister object by passing the price list to it. The POSmain program then will use the CashRegister object to scan items in a cart and print a receipt for each shopping cart one by one. At last, POSmain will use the CashRegister object to print a report for the day.
The students of CSIT111 and CSIT811 will print a different report for the day, which requires different design of your CashRegister class.

The output should be like this:-

One customer is checking out ...
========================================
Product Price Qty Subtotal
----------------------------------------
Bed $499.99 2 $999.98
Char $45.49 4 $181.96
TV $999.99 1 $999.99
Table $199.0 2 $398.0
-------------------------
Total $2579.93
========================================
One customer is checking out ...
========================================
Product Price Qty Subtotal
----------------------------------------
Bread $1.75 2 $3.5
Butter $2.84 1 $2.84
Ham $2.5 1 $2.5
Lettuce $1.0 1 $1.0
Milk $3.0 2 $6.0
Onions $0.54 3 $1.62
Tomato $0.76 5 $3.8
-------------------------
Total $21.26
========================================
Report for the day
========================================
Number of customers: 2
Total sale: $2601.19
List of products sold:
----------------------------------------
Product Qty
----------------------------------------
Bed 2
Bread 2
Butter 1
Char 4
Ham 1
Lettuce 1
Programming Fundamentals - 3/4 -
Milk 2
Onions 3
TV 1
Table 2
Tomato 5

Problem 9-19 (Algorithmic)

The product development group at Landon Corporation has been working on a new computer software product that has the potential to capture a large market share. Through outside sources, Landon's management learned that a competitor is working to introduce a similar product. As a result, Landon's top management increased its pressure on the product development group. The group's leader turned to PERT/CPM as an aid to scheduling the activities remaining before the new product can be brought to the market. The project network is as follows:

The activity time estimates (in weeks) are as follows:

1. Develop an activity schedule for this project and identify the critical path activities.
   If required, round your answers to two decimal places. If your answer is zero enter “0”.
   

   Activity		Expected Time		Variance
   A
   B
   C
   D
   E
   F
   G
   H
   I
   J

   Earliest

   Latest

   Earliest

   Latest

   Critical

   Activity

   Start

   Start

   Finish

   Finish

   Slack

   Activity

   A

   No

   B

   Yes

   C

   No

   D

   No

   E

   Yes

   F

   No

   G

   No

   H

   Yes

   I

   No

   J

   Yes

   
   Critical Path: B-E-H-J
   
2. What is the probability that the project will be completed so that Landon Corporation may introduce the new product within 25 weeks? Within 30 weeks?
   
   Expected project completion time =  weeks. If required, round your answer to two decimal places.
   
   . If required, round your answer to two decimal places.
   
   P(25 weeks) = . If required, round your answer to four decimal places.
   
   P(30 weeks) = . If required, round your answer to four decimal places.

Given information from the attached article... Given that some EV producers from China’s BoP can penetrate the US market, what are some of the lessons from indigenous reverse innovation in the era of globalization?

Reverse innovation is “any innovation that is adopted first in the developing world.” Gurus such as C. K. Prahalad noted that from the bottom of the pyramid (BoP), reverse innovation is likely to diffuse from emerging economies to developed economies. Yet, concrete examples of reverse innovation are few. Of the list of examples noted in Govindarajan and Trimble’s excellent new book Reverse Innovation, all of them are multinational subsidiaries in emerging economies developing innovative, low cost products (such as GE’s storied portable ultrasound developed in China). Other examples in Reverse Innovation include Deere & Company, EMC, Harman, Logitech, PepsiCo, and P&G. Are there any examples of reverse innovation that are truly indigenous in nature (i.e., developed by local/non-multinational firms) and that have successfully penetrated developed markets? The electric vehicle (EV) makers in China can be a great example of such indigenous reverse innovation. An EV is an electric car that does not burn a single drop of gasoline. Known as a “plug-in” vehicle, an EV is totally based on battery power, has no tailpipe, and thus has zero emission. It would be more revolutionary than Toyota’s hybrid Prius, which drives on battery power before its gasoline engine kicks in and recharges the battery. If you go to Beijing or Shanghai, you do not see many EVs. Like everywhere else in the world, the roads and highways in urban China are full of conventional cars. But if you travel to certain rural areas (such as Liaocheng and Zibo in Shandong province), locally produced EVs seem everywhere. In fact, dozens of EV makers have popped up in China, and most of them are experimenting with new products in a great entrepreneurial drive. While most of them have a hard time cracking the top tier market in China, a small number of them—in a fashion described by Prahalad and Govindarajan—have already penetrated the US market. If you see someone (or you yourself are) driving a Wheego or CODA EV in the United States, you are witnessing indigenous reverse innovation at work. How can the humble EV makers of China accomplish so much in a remarkably short span of time? After all, none of the traditional automakers in China has cracked the US market. Other than the Nissan Leaf (which is a full EV), few traditional automakers active in the US market have launched EVs. From the Bottom of the Pyramid—Within China Prahalad’s BoP model divides the whole world in three tiers, with low-income emerging economies occupying the base. We can extend the BoP model to what is unfolding in the automobile industry within one emerging economy (Exhibit 1). In the Chinese automobile industry, the top tier is occupied by foreign-branded cars produced by the joint ventures (JVs) between global heavyweights and top Chinese automakers, such as Shanghai-GM, Shanghai-Volkswagen, and Guangzhou-Honda. As China’s auto market becomes the largest in the world, it has also become the most competitive—as measured by the number of new models unleashed in a given year. The global heavyweights increasingly bring their newest designs with the fanciest styles and the most powerful engines to produce in China. The second tier consists of smaller Chinese automakers and their JVs with smaller global players. All the top-tier and most of the second-tier are state-owned automakers. But the second tier also includes privately-owned producers such as Geely (which recently took over Volvo) and BYD (which is the most aggressive in developing EVs powered by lithium-ion battery technology). Overall, the second tier players’ capabilities and aspirations are similar to those of the top tier. The BoP in China’s automobile industry consists of nontraditional producers of specialty vehicles—some of which are not necessarily “automakers” if you define automakers as the Toyotas, Fords, and Fiats of the world or the SAICs, FAWs, and Dongfengs of China. The BoP producers in China can typically trace their roots to agricultural vehicles (such as tractors and small pickups), recreational vehicles (such as golf carts), and/or electric motorcycles (such as mopads). They tend to be much smaller than the top-tier and second-tier automakers in China, have little influence or brand awareness outside their own regions, and thus are outside the radar screens of the global heavyweights. While larger automakers in China (and their foreign JV partners) are still embracing a largely “wait-and-see” attitude regarding EVs, BoP automakers in China, being smaller and more entrepreneurial, have rushed in. While dozens of them have entered, a few leading ones have emerged as winners. For example, Shandong-based Shifeng has sold more than 10,000 EVs, and has built an EV plant with a maximum capacity of producing 200,000 vehicles a year. QUESTION From a resource-based view, what are some of the outstanding capabilities that EV producers in China have? Why their larger competitors (incumbents) in China do not have such capabilities? So far, the EVs in China are technically known as low-speed EVs, because their maximum speed is typically only 40–80 kilometers (25–50 miles) per hour. They typically have a range of 80–100 kilometers (50–65 miles). Instead of using the more advanced lithium-ion battery, they often use off-the-shelf lead acid battery. While primitive by conventional standards, these EVs are meeting a great deal of demand in rural China. In such a BoP market within China, road conditions are not great (so high speed is not necessary), income levels are low, but people’s needs to travel longer distances are increasing. Marketed at about 30,000 yuan (about $4,400), these cars are not as inexpensive as Tata’s storied Nano (priced at $2,000–$3,000 in India). With the rising income levels, EVs become increasingly affordable to the rural population in China. For the same distance traveled, electricity is only 25% the cost of gasoline. Last but not the least, with zero emission, EVs offer unparalleled environmental benefits—potentially a great solution to China’s pollution problems. A total of 70% of China’s population live in small towns and rural areas—that is a huge market of about 900 million (three times the total size of the US population). Few of the rural folks commute more than 20 kilometers (12.5 miles) a day. Travel speed rarely exceeds 60 kilometers (37.5 miles) per hour. Moreover, from an infrastructure standpoint, EVs have a huge advantage in rural areas because of the low population density and more spacious housing—typically with a yard or a driveway where EVs can be plugged in and charged with little need to build additional and costly charging stations. In contrast, widespread development of EVs in urban China has to overcome significant infrastructure challenges: population density is high and housing tight (high-rises everywhere). Few can afford single-family dwellings that would allow for convenient charging in the yard or on the driveway. Therefore, wide spread investment in and construction of charging stations is a must, but urban land is much more expensive than rural areas. Overall, whether EVs can take off in urban China remains a question mark, but EVs—especially low-speed EVs made by BoP automakers such as Shifeng—have already taken off in many parts of rural China. Institution-Based Barriers to BoP Automakers One of the recent (and controversial) policy initiatives in China is to promote “indigenous innovation.” The Chinese government has announced that in theory, EVs are being promoted to be one of the pillars of the automobile industry, which is one of the “strategic” industries earmarked for government support. A Development Plan for the “New Energy” Car Industry (2011–2020) has listed nine specific EV models on its catalog for nationwide promotion in terms of qualifying for subsidies. While many foreign firms and governments naturally worry that the promotion of “indigenous innovation” would shut them out and some have complained to the Chinese government, not a single foreign automaker has complained. The reason is very simple: instead of being promoted by the government, BoP automakers are being discriminated against by institution-based barriers in China. Foreign automakers simply have no need to worry about any preferential treatment of the BoP automakers. Instead, BoP EVs are technically not even defined as “cars” (or “passenger vehicles”) by existing Chinese standards. Only high-speed EVs are classified as “cars” in China. But of the nine (high-speed) EV models on the catalog for the Development Plan for the “New Energy” Car Industry (2011–2020) that are eligible for subsidies, only one high speed EV—the BYD F3DM with a maximum speed of 150 kilometers (95 miles) per hour and a maximum range of 100 kilometers (62.5 miles)—has entered mass market. But the BYD F3DM is a Prius-like hybrid and not a pure EV. Despite the subsidies, its high price and low performance have not attracted many customers. On the other hand, none of the dozens of BoP EV models appears on the government’s catalog for subsidies. Despite the proclamation to promote “green cars,” the omission of BoP EVs on the government promotion catalogue is not an oversight. It is intentional. This is because the government promotion catalogue is influenced by China’s top-tier and second-tier automakers (and their foreign JV partners). Although these incumbents themselves are not too enthusiastic to introduce EVs, they do not wish to legitimate BoP EVs. Because low speed EVs are not classified as “cars,” in most parts of China they do not need to carry a license plate, but then their owners cannot purchase insurance either. Such EVs thus are potentially a safety hazard. As a result, they may not be “street legal” in many parts of China. Because of their low speed and lack of insurance, they certainly cannot drive on freeways. So their mobility is by definition limited. This is not a huge problem for now, given their short range per charge. Just like few unlicensed drivers everywhere are afraid of being caught, unlicensed EVs in BoP markets in China are institutionally vulnerable—they may be declared illegal and ordered off the streets (for example, for creating traffic jams) if the political winds blow against them. To prevent that unfortunate fate from happening, some local and provincial governments have passed city, county, and provincial regulations to legalize and protect the BoP EV producers and owners. This localized rule-making has typically taken place in regions that house such BoP automakers, such as Liaocheng and Zibo in Shandong province, Dafeng in Jiangsu province, and Fuyang in Anhui province. To facilitate further development of the EV industry, Shandong has become the first province to explicitly legalize low-speed EVs and allow them to hit the roads. In the community of Chinese policymakers, executives, and scholars, supporters of low-speed BoP EVs have urged for tolerance and nurturing given these vehicles’ upside potential and environmental attractiveness. Critics argue that with little regulation, safety features, and insurance protection, low-speed EVs are likely to proliferate to create more traffic jams and safety hazards. Critics claim that local rules protecting locally produced EVs are “unconstitutional” because they violate the central government’s power in making and enforcing nationwide traffic and vehicle registration laws. While debates continue to rage, one thing for sure is that such indigenous reverse innovation has a hard time breaking into the top tier, urban market in its own home country. Go Global from BoP Markets Since going from the BoP to the top tier market in their own country is so tough, a number of Chinese EV makers have gone global. At least two of them have cracked the US market. In 2007, Hebei-based Shuanghuan Auto developed its first EV, the two-door, two-passenger Noble. Unfortunately, the Noble was not allowed to be marketed as a “car” in China (as noted earlier). In 2009, Shuanghuan Auto joined hands with Wheego, an Atlanta-based start-up specializing in all-electric cars. After considerable modification and enhancement in terms of control and safety features undertaken in Ontario, California, the Noble was marketed as the Wheego Whip EV in the United States starting in December 2009. With a top speed of 40–55 kilometers (25–35 miles) per hour, a range of 65 kilometer (40 miles), and 10 hours to fully charge its engine, the Wheego Whip retailed at $18,995. After adding options and taxes and then applying a $2,500 federal tax credit, the net price was $17,995. After a year, a significantly improved Noble became the Wheego Life. With a top speed of 105 kilometers (65 miles) per hour, Wheego Life was fully highway capable (and “street legal”) in the United States. It had a range of 160 kilometers (100 miles) and only needed five hours to fully charge its engine. The Wheego Life retailed at $32,995. After adding options and taxes and then applying a $7,500 federal tax credit, the net price was $26,495. In addition, some US state and local tax credit can further bring down the price tag. For example, in California, the Wheego Life appeared on the state’s list of approved “green cars” for state subsidies—this is no small accomplishment, considering that the Noble (and all BoP EVs in China) failed to appear on China’s Development Plan for the “New Energy” Car Industry (2011–2020) that would make them eligible for subsidies. As a result, Wheego Life owners in California could enjoy an additional $2,000 off. In addition, Arizona, California, Florida, Georgia, Hawaii, Maryland, New Jersey, New York, North Carolina, Tennessee, Utah, and Virginia allowed EVs such as the Wheego Life to enjoy the privilege of using high-occupancy vehicle (HOV) lanes. Another example is Hebei-based Great Wall Motors. In 2011, Great Wall signed an alliance agreement with Los Angeles-based CODA Automotive, which would export EVs to the United States. With a top speed of 136 kilometers (85 miles) per hour, the four-door, five-passenger CODA car was also fully “street legal” in the United States. It had a range of 240 kilometers (150 miles) and needed six hours to fully charge. It retailed at $44,900. After applying a $7,500 federal tax credit, the net price was $37,400.

PART A

GanJee Pty Limited (GanJee) owns and develops properties in the Gosford CBD on the Central Coast of NSW. Upon completion of construction the company leases the apartments and retail space and provides tennants services including waste removal, maintenance and shared facilities like airconditioning. All leases are signed for a period of less than 5 years and are then reviewed before renewal or extension. You wish to establish the fair value of one of GanJee’s Gosford properties using AASB 13/IFRS 13. GanJee purchased the property in 2001 when the Gosford CBD was in decline. At the time, GanJee was able to snap up the property for $0.5 million. In 2015, existing property was demolished and GanJee constructed two impressive tower block buildings with retail space below. The property also includes a hotel, office space and apartments. Construction was expensive, costing $400 million. You have ascertained the following information for your assessment: • The company commissioned the expert opinion of two reputable independent expert appraisers. These appraisers delivered valuation A and valuation B. Valuation A contained the appraiser’s opinion that the property value for GanJee’s Gosford holding had a fair value of $1.3 billion based upon earnings before interest and tax multiplied by a conservative earnings multiple of 6 which is more likely to be considered fair by a potential buyer for the properties. The second valuer in providing valuation B expressed the opinion that the properties had a fair value of $2.75 billion based upon earnings before interest and tax multiplied by an earnings multiple of 8 which is more likely to be considered fair by a potential seller of the property. Both appraisers acknowledged that valuing the property in the current economic climate was difficult as generally there are very few sales of comparable properties. The appraisers communicated that they used their experience in observing valuations of residential rather than commercial and residential properties.  The directors estimate that the current cost of replacing the property would be $1.8 billion based on the current design with today’s construction costs, including labour, materials and overheads. Property prices in the Gosford CBD have increased substantially since 2001. The CBD went through a rapid growth phase in 2017 but there is currently a lull as the City Council does not wish to have new development. The GanJee property is surrounded by fairly derelict buildings which makes valuation difficult. • Present value of future cash flows: The directors have calculated net cash inflows over the next 20 years estimated to be $300 million per year, based on projected cash flows from rental income, tax savings and expenditures. The directors expect that the building will need substantial renovation in 20 years’ time. The directors based their valuation on the following factors: ✓ discount rate of 11.5% to 14.5%; ✓ average subsequent tenure period of ten years for retail units (ILU) and four years for serviced apartments (SA).

Required

Discuss each of the above four values as a basis for establishing a fair value for the property. In accordance with AASB 13/IFRS 13 which methodology do you believe is most appropriate? What additional information if any would you wish to obtain to make a better estimate?

PART B

Walkabout Park wants to determine fair value of the animals in their zoo. They hold the animals primarily for breeding and preservation of native species but also for the benefit of the local population and school group visits.

Required

Provide your recommendation for how the entity should go about measuring the biological assets’ fair value. In your response provide an explanation of possible alternatives and justify your recommendation.

1. You are a portfolio manager with $10 million in stocks. You like the stocks you own, but the portfolio beta is 1.2 and you are concerned about a market decline. Your investors expect you to be “fully invested”, so you do not want to eliminate risk entirely. You decide that you would like to reduce the portfolio’s beta using futures, but only for the next 3 months. You know that the spot S&P index is at 1900. The dividend rate on the stocks in the index is 2.2%/year. The 3-month risk-free rate is .36%. At what price do you expect the 3-month futures to be trading? The value of one mini S&P contract is $50 times the index. How many contracts do you need to reduce portfolio beta to 1.0? Are you long or short?

2. You have a portfolio of Treasury notes. You have a report that shows the change in price of your portfolio from yesterday to today. You also know how much the 5-year Treasury benchmark yield changed. Estimate the duration of your portfolio using only the following info. Assume no accrued interest from yesterday, and no portfolio purchases or sales.

                               8/26/2017     8/27/2017

                           Portfolio value in millions at the close of the market         $50.125     $50.250

5-year Treasury benchmark yield to maturity     1.46%                 1.41%

                           Next, you would like to reduce the duration of your portfolio by 1.0 years, but do not want to sell any of your bonds. The 5-year Treasury note futures trade at 118.50. The contract is for $100,000 par amount of underlying notes. (That means that the value of one contract is 118.50*100,000/100=$118,500.) The duration of the futures underlying is 4.7 years. How many futures contracts do you need to short to reduce the combined duration by 1.0 years?

3. Today is Jan 27, 2016. You are negotiating with a bank to borrow $3 million for 90 days     at a rate of 3-month LIBOR plus 1.00%. You are confident they will approve you, but their credit process takes 30-45 days. You are worried that LIBOR will rise from today’s level, and would like to “lock in” today’s rate level. Eurodollar futures are trading at :

Bid     Ask

Feb 2016     99.3775     99.3800

Mar 2016     99.3450     99.3500

Apr 2016     99.3100     99.325

Last day of trading for each month is about the 15th. What action could you take? Ignore margin. Recall that the rate implied by the Eurodollar contract is 3-month LIBOR. Contract size is $1,000,000 notional.

4. BMW expects to sell an average of 2,000 autos each month for the next 3 years in the U.S. They build the cars in Germany; therefore, their costs are incurred in euros. The average sale price in the U.S. is $50,000/auto. They expect prices to stay at that level over the next several years. They would like to hedge so that their revenue is very predictable (in euros) from their U.S. sales. U.S. and German interest rates are flat for all maturities through 3 years at 2% in the U.S., and -0.35% in Germany. The current spot exchange rate is $1.12/euro. What should their hedge be?

Question 1

At the beginning of 1976 a relative migrated to Australia with $10,000 ‘spare cash’. The money could have been used to buy a block of land or invested in an ‘at-call’ savings account that paid interest at 8% p.a. compounded half-yearly. At the end of 2018, the land was valued by a local real estate agent who was keen to list the property on behalf of his agency, at a price of approximately $400,000.

Required:

1. Which of the alternative investments had the higher value at the end of 2018? Justify your response with appropriate calculations.

(Students should write no more than 50 words for this part of the question).

2. i)Assuming the half-yearly compounding of interest, what was the rate of growth in the land value over the total period expressed as a nominal annual interest rate?

2. What was the rate of growth in the land value over the total period expressed as an effective interest rate?

3. What was the rate of growth in the ‘at-call’ savings account over the total period expressed as an effective interest rate?

3. What investment in the savings account would have been necessary at the beginning

of 1976, to have the same value as the land was worth at the end of 2018? Briefly explain your response.

(Students should write no more than 50 words for this part of the question).

4. Recognising both your finance skills and ‘common sense’, one of your friends has asked whether your calculations above allow you to determine which of the investments would have been ‘better’ to make at the beginning of 1976, given the outcomes discussed above at the end of 2018. Provide a well-reasoned, complete response to this question taking into consideration various financial and non-financial issues.

(Students should write no more than 100 words for this part of the question).

e. i)You have now been provided further information that the investment in the land required the owner to make continuous annual payments of council rates over the total period held. These amounts are determined in accordance with Table 1 below. Assuming the land was sold at the end of 2018 (but ignoring the expected sale value), what is the adjusted present value at the beginning of 1976 of all the cash outflows relating to the acquisition and continued ownership of the land?

Note:     For the purposes of this question assume the following:

1. Rates are payable on the anniversary of each year of land ownership.

2. The annual amount of the rates are determined in accordance with the following formula;

Initial Purchase Cost ($) x Factor (times) x Relevant Percentage (%)

3. Rates are still payable for the 2018 year (for the full year).

Table 1

2. Taking into consideration the calculations from part e) i) of this question, what is the rate of growth in the land value over the total period expressed as an effective interest rate?

(Students should write no more than 50 words for this part of the question).