Estimate Increase In Property Price Overtime

Question

You are the financial manager of Wal-Mart who will submit a report on this year’s (2013) financial transactions to the company’s CFO Charles Holley. You want to verify that the following estimates prepared by your staff are correct.  

Wal-Mart just bought an investment property for $10 million that it will sell in 2020. The return on this investment (i.e., interest rate, growth rate, etc.) is 4.5 percent per year. At what price can this property be sold in 2020? Staff Estimate: $12 million (please verify)

Summary

The question belongs to Finance and it is about a scenario of Wal-Mart has been given. The financial manager of Wal-Mart has to submit a report on the year’s financial transaction of the company. Wal-Mart had just bought an investment property that it will sell in 2020. The price at which the property can be sold in 2020 needs to be estimated.

Total Word Count 27

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