He simply multiplied the annual Owner Earnings of the farm, $28,000, by ten: $280,000. If he got the farm for that price, the $28,000 of Owner Earnings meant he would get a 10 percent return on his investment in the first year. That’s a good, solid return, and he was likely to get a much higher one in the future as Owner Earnings grew with higher crop prices and better production. So he offered $280,000 for the farm. And he bought the farm—not figuratively, literally.”
