Archer daniels midland company is considering buying a new

Assignment Help Finance Basics

Reference no: EM13380547

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 $11.80 million. This investment will consist of $2.90 million for land and $8.90 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 $5.02 million, $2.35 million above book value. The farm is expected to produce revenue of $2.02 million each year, and annual cash flow from operations equals $1.92 million.

The marginal tax rate is 35 percent, and the appropriate discount rate is 10 percent. Calculate the NPV of this investment.

Reference no: EM13380547

Questions Cloud

Dan and cheryl are married file a joint return and have no : dan and cheryl are married file a joint return and have no children. dan age 45 is a pharmaceutial salesman and

Task 1 assessing loan options for airjet best parts incthe : task 1 assessing loan options for airjet best parts inc.the company needs to finance 8000000 for a new factory in

You are considering the start of a small business that : you are considering the start of a small business that sells generator gaskets. according to your market research you

Calculate the weighted average cost of capitalgreat : calculate the weighted average cost of capital.great corporation has the following capital situation.debt one thousand

Archer daniels midland company is considering buying a new : archer daniels midland company is considering buying a new farm that it plans to operate for 10 years. the farm will

In early 1990boeing co decided to gamble 4 billion to build : in early 1990boeing co. decided to gamble 4 billion to build a new long distance 350-seat wide body airplane called the

Canyon drilling inc has just come under new management one : canyon drilling inc. has just come under new management. one of the first things the new management wants to accomplish

Calcin jacobs is a widower who recently retired after a : calcin jacobs is a widower who recently retired after a long career with a major midwestern manufacturer. beginning as

Selecting kanton companys financing strategy and unsecured : selecting kanton companys financing strategy and unsecured short-term borrowing arrangement.morton mercado the cfo of

User Account

All Pages