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Ivanhoe Company is considering buying a new farm that it plans to operate for 1 0 years. The farm will require an initial investment of
Ivanhoe Company is considering buying a new farm that it plans to operate for years. The farm will require an initial investment of $ million. This investment will consist of $ million for land and $ million for trucks and other equipment. The land, all trucks, and all other equipment are expected to be sold at the end of years for a price of $ million, which is $ million above book value. The farm is expected to produce revenue of $ million each year, and annual cash flow from operations equals $ million. The marginal tax rate is percent, and the appropriate discount rate is percent. Calculate the NPV of this investment. Do not round factor values. Round final answer to decimal places, eg NPV $ The project should be
Ivanhoe Company is considering buying a new farm that it plans to operate for years. The farm will require an initial investment of $ million. This investment will consist of $ million for land and $ million for trucks and other equipment. The land, all trucks, and all other equipment are expected to be sold at the end of years for a price of $ million, which is $ million above book value. The farm is expected to produce revenue of $ million each year, and annual cash flow from operations equals $ million. The marginal tax rate is percent, and the appropriate discount rate is percent. Calculate the NPV of this investment. Do not round factor values. Round final answer to decimal places, eg
NPV $
The project should be
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