Planning to plant one of two types of alfalfa seed

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Reference no: EM131918773

Farmer Brown is planning to plant one of two types of alfalfa seed. The more expensive of the two will produce higher yields over a 3-year period. The opportunity cost of capital is 12 percent. He has calculated the following after-tax net cash flows: Year Select Seed Cheap Seed 0 -$4,000 -$840 1 3,000 630 2 2,000 630 3 1,000 420 What do you recommend? Why?

Reference no: EM131918773

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