This is a very nice paper and reads very well. Thank you for another job well done!
Hello- I’m struggling to figure this question out:
Archer Daniels Midland Company is considering buying a new farm that it plans to operate for 10 years. The farm will require an initial investment of $12.20 million. This investment will consist of $2.80 million for land and $9.40 million for trucks and other equipment. The land, all trucks, and all other equipment is expected to be sold at the end of 10 years at a price of $5.03 million, $2.02 million above book value. The farm is expected to produce revenue of $2.03 million each year, and annual cash flow from operations equals $1.86 million. The marginal tax rate is 35 percent, and the appropriate discount rate is 9 percent. Calculate the NPV of this investment. (Round intermediate calculations and final answer to 2 decimal places, e.g. 15.25.)
Initial Investment = 12.20 Million = 12200000Land Book Value at the end of 10 year = costLand Book Value at the end of 10 year = $ 2.80 MillionLand Post Tax salvage Value =( 5.03 + 2.80) –…
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