Case 28 Olives in Your Backyard by Daniel Franchi and Lee McFarland California Polytechnic State University-San Luis Obispo You may buy an olive farm, where the olives will be sold as olives or olive oil. The trees are planted on 15 acres of the 40-acre parcel. The farm's cost is S500,000, which includes the following assets: 3000 olive trees, approximately 4 years old, value-S50 per tree wells, value S12,000 per well 1 solar powered pumping system, value S4000 1 large bam and one small out building, value S65,000 About 3 miles of fencing, valued at S4 per foot About 2 miles of dirt roads, worth $10,000 5 gates, worth S1000 each 20,000 feet ofirrigation hose, at S.20 per foot Underground piping for 15 acres, worth S15,000 Storage tank valued at S3000 For this analysis assume that all depreciable assets (including future purchases have 7 year recovery periods for MACRS. Assume that existing assets are depreciated from their initial basis over the full-recovery period. Note: the value of the raw land, net after subtracting the value of above assets, is not depreciable. Additional investments (assume EOY for analysis purposes) include