# Finance

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 \$12.00 million. This investment will consist of \$2.60 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 \$5.28 million, \$2.29 million above book value. The farm is expected to produce revenue of \$2.05 million each year, and annual cash flow from operations equals \$1.89 million. The marginal tax rate is 35 percent, and the appropriate discount rate is 9 percent. Calculate the NPV of this investment.

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