You are given the following information: Loan information Cash rent($/acre) $200 Land price $333,333 Land price(S/acre) $3,333 Down payment $100,000 Acres 100 Loan value 200,000 Yield (bu/acre) 140 Years 40 Price ($/bu) $4.00 Annual interest rate 8.00% Gov payments ($/acre) $10 Annual payment $20,726 Revenues (S/acre) Operating costs ($/acre) $500 Growth rate 3% Discount rate 8% Marginal tax rate 25% Fill in the following table for the case where land is purchased. Total Total Loan Interest Revenue Operating payment payment Principal payment Remaining Taxes Loan Net after tax cash flow costs Balance 1 2

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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You are given the following information:
Loan information
Cash rent($/acre)
$200
Land price
$333,333
Land price(S/acre)
$3,333
Down payment
$100,000
Acres
100
Loan value
200,000
Yield (bu/acre)
140
Years
40
Price ($/bu)
$4.00
Annual interest rate
8.00%
Gov payments ($/acre)
$10
Annual payment
$20,726
Revenues (S/acre)
Operating costs ($/acre)
$500
Growth rate
3%
Discount rate
8%
Marginal tax rate
25%
Fill in the following table for the case where land is purchased.
Total
Total
Loan
Interest
Revenue Operating
payment payment
Principal
payment
Remaining Taxes
Loan
Net after tax
cash flow
costs
Balance
1
2
Transcribed Image Text:You are given the following information: Loan information Cash rent($/acre) $200 Land price $333,333 Land price(S/acre) $3,333 Down payment $100,000 Acres 100 Loan value 200,000 Yield (bu/acre) 140 Years 40 Price ($/bu) $4.00 Annual interest rate 8.00% Gov payments ($/acre) $10 Annual payment $20,726 Revenues (S/acre) Operating costs ($/acre) $500 Growth rate 3% Discount rate 8% Marginal tax rate 25% Fill in the following table for the case where land is purchased. Total Total Loan Interest Revenue Operating payment payment Principal payment Remaining Taxes Loan Net after tax cash flow costs Balance 1 2
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