A farm building costs $54,000 to build today and will earn after-tax net cash flows of...
A farm building costs $54,000 to build today and will earn after-tax net cash flows of $16,000 per year for five years. There is no salvage value on this building at the end of the five-year life, and the farmer’s cost of capital 9%.
a. What is the net present value?
b. What is the benefit-cost ratio of this building at a cost of capital of 9%?
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A farm building costs $54,000 to build
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