A large-scale egg producer is considering adding cage-free egg production facilities to their current operation in response to growing consumer demand. They currently have 8 working conventional egg production facilities that each generate $95,200 real net revenue annually before taxes. They estimate one cage-free facility will generate $1,474,000 real net revenue annually before taxes. They have the option of closing one of their existing facilities and converting it to a cage-free facility or building a brand-new cage-free facility on undeveloped land. Converting an existing facility would cost $1,140,000 and they would lose the income from the original facility in the year it's converted. Building a new facility would cost $3,335,000. For either option, they would finance 80% of the construction cost with a 15 year fully amortized loan with an interest rate of 7.15%. The IRS will allow to depreciate the improvements over 27 years and the marginal tax rate is 22%. The egg producer requires a pre-tax return to capital of 5% and they have a risk premium of 6%. Inflation is expected to remain at 8%. What would be the annual loan payment if the egg farm opts to convert an existing facility? a $101,083 b.$79,673 c.$109,525 d. $138,906 e. None of the above Calculate the annual loan payment if the egg farm decides to build a new facility a $190,762 b.$186,462 c$369,642 d.$295,713 Calculate the tax savings from interest in year 3 if they opt to build a new facility a $37,863 b.$38,548 c.$40,311 d.$8,393 e. None of the above If the farm chooses to convert an existing facility, they may want to pay off the remaining principal at the end of the 6th year. What would be the balloon payment? a $705,071 b.$479,595 c.$654,400 d.$701,467 e. None of the above Calculate the after-debt Net Cash Flow for the 6th year if the farm makes that balloon payment. a $1,403,026 b.$1,207,132 C.$1,304,026 d.$1,914,408 e. None of the above Calculate the remaining principal in year 6 if the farm builds a new cage-free facility a.($1,506.85) b.$1,224.57 c.$3,003.25 d. $1,089.20 e. None of the above