Real Estate Math
A Maine investor acquires 5 acres of land for $125,000 and divides it into 10 equal lots to sell. If the total development costs are $25,000 and the investor wants a 20% profit, what must each lot sell for?
A$15,000
B$18,000✓ Correct
C$18,500
D$20,000
Explanation
Total cost = $125,000 + $25,000 = $150,000. Desired profit = $150,000 × 20% = $30,000. Total needed = $180,000. Per lot = $180,000 ÷ 10 = $18,000.
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