### What is the NPV and should the project be accepted or not

Assignment Help Financial Management
##### Reference no: EM13731587

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 \$12.00 million. This investment will consist of \$2.00 million for land and \$10.00 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 \$5.00 million, \$2.00 million above book value. The farm is expected to produce revenue of \$2.00 million each year, and annual cash flow from operations equals \$1.80 million. The marginal tax rate is 35 percent, and the appropriate discount rate is 10 percent. Calculate the NPV of this investment. (Round intermediate calculations and final answer to 2 decimal places, e.g. 15.25.)

What is the NPV and should the project be accepted or not?

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