Determine the cash flows and the npv

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Reference no: EM132789302

Problem 1: Determine the cash flows, the NPV, the IRR and the MIRR.

Number of Tillable Acres 315

Price per acre $ 3400

Closing costs per acre $ 100

Terminal value per acre $ 3000

Cash flow Data

Growth rates in receipts and expenses 2.5%

Income Tax Rate ...................................... 30%

% Financed ................................................ 70%

Interest Rate on Debt............................... 7.5%

Amortized over 20 yrs

Equity Rate ............................................ 18%

Planning Horizon ..................................... 10yrs

Production History

5 year Soybean yield history........ 45bu/acre

Projected Market price/bu. ................ $8.25

Direct costs per acre ...........................$235.00

Reference no: EM132789302

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