A soybean farmer in the Delta is considering investing in drones to better monitor her crops on her 300-acre operation. Drone deployment will help the farmer spot disease or pests infecting her rice. The estimated increased yield/acre from the drones is 25 bu/acre. The price per bushel is $6.45. The initial purchase of each drone is $1,500 and it will require 3 drones. Additional batteries cost $150 each, so she will get an extra battery for each drone. Also, in order to properly operate the drones, she will take a training course, which costs $300. She will finance the purchase for 12 months with 3% interest. These drones should be operational for 3 years, but will not hold a terminal value. The farmer anticipates the marginal tax rate to be 20% over the lifespan of the equipment. The farmer requires a 14% return to capital rate (pre-tax) and the investment will depreciate using straight line over 5 years.

(i) Calculate the Initial Cost

(ii) Calculate the revenue of the operation after drone deployment

(iii) Calculate the after-tax net returns

(iv) Calculate the tax savings from depreciation

(v) Calculate the after-tax terminal value

(vi) Calculate the discount rate for calculating the NPV

(vii)Calculate the NPV of the investment

(viii)Calculate the break-even improvement in production(yield/acre) from the drones?