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A farmer couple has a chance to rent some farmland for $300 per acre. They put together the following budget (per tillable acre). Show your
A farmer couple has a chance to rent some farmland for $300 per acre. They put together the following budget (per tillable acre). Show your work for partial credit. Expected annual gross income from crops $1,000 Expected input costs (seed, fertilizer, pesticides, drying) $420 Machinery and labor costs $210 Cash rent $300 e. How much would the land be worth using the income approach to valuing land, if the discount rate is 4.0% and ownership costs (property taxes and upkeep) in addition to production costs are $40 per acre? /tillable acre f. How much would their net cash flow from the land be if they bought it with a $8,000 per acre loan and their annual payment was $375 per acre? tillable acre
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