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Question 4. Capital Budgeting (2 points) You are given the following information: Cash rent($/acre) $120 Land price $1,500 Acres 100 Yield (bu acre) 120 Price
Question 4. Capital Budgeting (2 points) You are given the following information: Cash rent($/acre) $120 Land price $1,500 Acres 100 Yield (bu acre) 120 Price ($/bu) $5.00 Gov payments (S/acre) $25 Revenues (Sacre) Operating costs (S/acre) $500 Loan information Land price Down payment Loan value Years Annual interest rate Annual payment $150,000 $25,000 125.000 40 5.00% $7,285 Growth rate Discount rate Marginal tax rate 5% 10% 25% Please fill in the following table for the case where land is rented. Year Revenues Operating costs Rent payments Taxes Net after tax cash flow 050 $0 0 SO $0 2
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