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I have been offered my neighbor farm for 4 years lease. I have two options for payment. The first payment option requires me to give
I have been offered my neighbor farm for 4 years lease. I have two options for payment. The first payment option requires me to give him a crop share of 1/4 of my crop at the end of each year. With the second option, I can pay him a cash rent of $350/acre at the beginning of each year. Which option do I choose? If I use a 7% interest rate. What are my crop-share rent expense and discount factor if my total expected crop value is $750/acre? What is my present value? And if I choose to pay him a cash rent of $350/acre. What are my discount factor and present value? Is has any formula for both options? Please show me
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