A cotton farmer in Texas, is considering buying more land to expand her operation. She can cultivate an additional 150 acres. The price of land is $2,100 per acre. Each acre will generate $730 in operating receipts and have operating expenses of $590 per year. She can take out a loan of $1,950 per acre, fully amortized over 20 years with an interest rate of 5.15%. After 10 years, she would sell the land with a real terminal value of $1.940. The rate of inflation is 2.3% and the farmer's marginal tax rate is 18%. She requires a real pre-tax, risk-free return on capital of 7% and a risk premium of 3.5%. The cotton farmer also considers installing a soil quality monitoring system on all 150 acres of the new land. The system would increase real net revenue by $45 per acre. The soil sensor system costs $22,500 and would be partly covered by an additional $18,800 loan with a 4.95% interest rate, fully amortized over 5 years. The IRS will allow the sensor system to be depreciated over 15 years. It has a real terminal value of $2,440 in year 10. (1) Calculate the per-acre nominal after-tax net return in year 4 (land only). a. $144 b. $126 c. $176 d. $132 e. None of the above Enter Response Here: (ii) What is the after-tax, risk-adjusted discount rate? a. 6.17% b. 5.47% C. 8.61% d. 9.04% e. None of the above Enter Response Here: (iii) Calculate the annual loan payment per-acre (land only). a. $166 b. $105 c. $150 d. $201 e. None of the above Enter Response Here