During the past year, Carla McGill planted a new vineyard on 150 acres of land that she leases for $30,900 a year. She has asked you, as her accountant, to assist her in determining the value of her vineyard operation.

The vineyard will bear no grapes for the first 5 years (1-5). In the next 5 years (6-10), Carla estimates that the vines will bear grapes that can be sold for $64,300 each year. For the next 20 years (11-30), she expects the harvest will provide annual revenues of $110,090. But during the last 10 years (31-40) of the vineyard's life, she estimates that revenues will decline to $74,990 per year.

During the first 5 years, the annual cost of pruning, fertilizing, and caring for the vineyard is estimated at $8,810; during the years of production, 6-40, these costs will rise to $11,380 per year. The relevant market rate of interest for the entire period is 4%. Assume that all receipts and payments are made at the end of each year.

Dick Button has offered to buy Carla's vineyard business by assuming the 40-year lease. On the basis of the current value of the business, what is the minimum price Carla should accept? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.)

Minimum price at which Carla should accept the business

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