# Hello I M Struggling To Figure This Question Out Archer Daniels Midland Company

Hello- I’m struggling to figure this question out:

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 \$12.20 million. This investment will consist of \$2.80 million for land and \$9.40 million for trucks and other equipment. The land, all trucks, and all other equipment is expected to be sold at the end of 10 years at a price of \$5.03 million, \$2.02 million above book value. The farm is expected to produce revenue of \$2.03 million each year, and annual cash flow from operations equals \$1.86 million. The marginal tax rate is 35 percent, and the appropriate discount rate is 9 percent. Calculate the NPV of this investment. (Round intermediate calculations and final answer to 2 decimal places, e.g. 15.25.)

Initial Investment = 12.20 Million = 12200000Land Book Value at the end of 10 year = costLand Book Value at the end of 10 year = \$ 2.80 MillionLand Post Tax salvage Value =( 5.03 + 2.80) –…

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