Archer Daniels Midland Company is considering buying a

new farm that it plans to operate for 10 years. Th e farm will require an initial investment of $12

million. Th is investment will consist of $2 million for land and $10 million for trucks and other

equipment. Th e land, all trucks, and all other equipment is expected to be sold at the end of 10

years for a price of $5 million, $2 million above book value. Th e farm is expected to produce

revenue of $2 million each year, and annual cash fl ow from operations equals $1.8 million. Th e

marginal tax rate is 35 percent, and the appropriate discount rate is 10 percent. Calculate the

NPV of this investment.