You are thinking about purchasing a new Case Quadtrac 620. The purchase price is $435,000. You plan to operate the tractor for 4 years. You predict that you can sell it for $225,000 at the end of 4 years. What is your annualized cost of owning this tractor if your required return on capital is 9.75%?

The owners of Beaver Mountain are wanting to sell their resort. 2015 net annual returns to the resort were $113,000 and you expect that to stay the same for the next 10 years. At the end of 10 years, you expect the resort to sell for $1.5 million. Calculate the market value of the resort today if the market rate of return on comparable investments is 11%.

A local farmer has come to you to for help in analyzing a possible investment. The farmer has been talking with a new fertilizer plant and has struck up a deal with the plant if he is able to buy the fertilizer in bulk. The farmer currently has no facilities to store the fertilizer. The farmer has received a bid of $335,600 for building a facility to store the fertilizer. The building requires steady ventilation and routine maintenance that the farmer has estimated to be $41,500 annually. The farmer also estimates that he will save $88,000 a year in fertilizer expenses (treat this as operating revenue). The building will have a $165,000 terminal value at the end of four years. The farmer requires a 6.5% return on capital. What is the NPV?

Based on the previous question, what is the IRR?