I keep getting partial credit for this problem, however I'm not sure which part I'm getting incorrect. Please help! Thank you!

A farmer is thinking about investing in a center pivot irrigation system to irrigate 80 acres of land in Fresno. With an irrigation system, operating expenses would increase by $75 per acre due to electricity, maintenance and additional labor. It is estimated that the irrigation will increase yields and thus operating receipts by $150 per acre. The cost for drilling a well would be $8,200 and the cost for the center pivot irrigation system would be $31,000. The irrigation system would be mile long and would irrigate 80 acres. Suppose that the farmer wants to evaluate this investment over a five-year period of time. The farmer believes that if he sold the farm in five years, the irrigation system would add $31,000 to the sale price. The farmer anticipates that his marginal tax rate over the next six years will be 15%. The IRS will allow the farmer to depreciate the investment using straight line over 15 years. Assume that the terminal value of this investment is $31,000 at the end of five years. The farmer requires a 10% return to capital (pretax).

(i) Calculate the Initial Cost

a. $39,200

b. $22,800

c. $31,000

d. $8,200

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(ii) Calculate the after-tax net returns

a. $10,200

b. $12,000

c. $5,100

d. $75

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(iii) Calculate the tax savings from depreciation

a. $310

b. $392

c. $2,221

d. $2,613

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(iv) Calculate the after-tax terminal value

a. $29,450

b. $33,320

c. $26,350

d. $30,270

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(v) Suppose that the discount rate is 8.5%. Using information from your answers above, what is the NPV for the investment?

a. $1,835.39 b. $4,680.59

c. $2,572.93 d. $4,104.83

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