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Complete an analysis of the investment assigned to you by letter. Complete a spreadsheet where you determine the cash flows, the NPV, the IRR and the MIRR. Then make a determination of which scenario would be acceptable and then rank them.

Investment Data for a Crop Farming Enterprise

Scenario 1 Without Debt Financing Part A Investment Data 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 0% Interest Rate on Debt. 7.5% Amortized over 20 yrs Equity Rate .. 9% Planning Horizon . 10yrs Production History 5 year Soybean yield history........ 45bu/acre Projected Market price/bu. ....... $8.25 Direct costs per acre $235.00

Scenario 2 With Debt Financing Part A Investment Data 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

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