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Archer Daniels Midland Company is considering buying a new farm that it plans to operate for 10 years. The farm will require an initial investment of $12 million. This investment will consist of $2 million for land and $9.60 million for trucks and other equipment. The land, all trucks, and all other equipment are expected to be sold at the end of 10 years for a price of $5 million, which is $2 million above book value. The farm is expected to produce revenue of $2 million each year, and annual cash flow from operations equals $1.91 million. The marginal tax rate is 35 percent, and the appropriate discount rate is 10 percent. Calculate the NPV of this investment. (Round intermediate calculations to 4 decimal palces, e.g. 0.5275 and final answer to 2 decimal places, e.g. 15.25.)
Write down the formula for the total rate of return over 2 years. - What is the expected total rate of return over 2 years?
what is a sensitivity analysis? how would you use it in planning for future expansions? what role does this kind of
What factors does Standard & Poor's analyze in determining the credit rating it assigns to a sovereign government?
Tauscher Textiles Corporation has an inventory conversion period of 45 days, a receivables collection period of 47 days, and a payables deferral period of 35 days. If Tauscher's sales are $3,309,028 and all sales are on credit, what is the firm's inv..
Cost of Capital. Blues, Inc., is an MNC located in the United States. Blues would like to estimate its weighted average cost of capital. On average, bonds issued by Blues yield 9%. Currently, Treasury security rates are 3%. Furthermore, Blues' stock ..
Bradley is looking to purchase a consol bond (perpetuity) from the British Government. The bond pays $100 per year and is currently selling at $2,250. What is the assumed annual cost of capital of this bond?
Tai Credit Corp. wants to earn an effective annual return on its consumer loans of 15.8 percent per year. The bank uses daily compounding on its loans. What interest rate is the bank required by law to report to potential borrowers?
The Arden County, Maryland, superintendent of education is responsible for assigning students to the three high schools in his county. He recognizes the need to bus a certain number of students, for several sectors of the county are beyond walking di..
DMA Corporation has bonds on the market with 11.5 years to maturity, a YTM of 7.2 percent, and a current price of $1,054. The bonds make semi annual payments and have a par value of $1,000. What must the coupon rate be on these bonds?
In 750 to 1,000 words total, APA 6th ed. format, (Part 1) explain how a short position can be protected with options; use examples, and (Part 2) comment on how leverage works in purchasing call options??
Suppose that the 6-month, 12-month, 18-month, and 24-month zero rates are 5%, 6%, 6.5%, and 7%, respectively. What is the 2-year par yield?
"Sophia Dueno organized Newtown Type, Inc. in January 1999. The corporation immediately issued at $12 per share one-half of its 150,000 authorized shares of $1 par value common stock. Prepare the stockholder’s equity section of the balance sheet at D..
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