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A farmer plans to spend $110,000 to plant pomegranate bushes. It will take 4 years for the bushes to provide a usable crop. He estimates
A farmer plans to spend $110,000 to plant pomegranate bushes. It will take 4 years for the bushes to provide a usable crop. He estimates that every year for 20 years after that he will receive a crop worth of $10,500 per year. NPV of this investment is negative 42097.64 so the farmer should not invest in planting the pomegranate bushes
i)Discuss what incentives the government can provide to the farmer to make the investment more worthwhile.
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