Scenario 11.1: Mariana has decided that she would like to build a private electric railway that would directly connect her small town to her favorite casino 75 miles away. She discovers that to build her railway, she will need to purchase an equal amount of land from 5 ranchers: Abe, Ben, Cat, Don, and Eve. Mariana believes that the revenue she would receive from running the railroad would be enough to cover all of her construction costs and leave her $3 million to buy the land. Mariana calculates the land she needs to build the railway will cost her $2 million.
-Refer to Scenario 11.1. How much would Mariana expect to pay each landowner for his or her land?
A) $200,000
B) $400,000
C) $600,000
D) $3 million

Question

Quizplus · Accepted Answer

Mariana expects to pay a total of $2 million for the land needed from the 5 ranchers. Therefore, she would expect to pay each landowner $2 million / 5 = $400,000.