CropExpected yield per acre without drainageYield boost 10%Expected price per acre:Additional revenue per acreAdditional revenueAverageAAcres tiledPrice per acre for tileTotal investmentTax rateCapital cost allowance (depreciation)Discount rateExpected yield boostYear4...01234567GRE22856456E50001112131415161718192123CornBProfitability Ratios22022511717,49014.1451501,500225,00015%25%6%10%UCC Beginnir CCA225,000196,875147,656110,74283,05762.29246.71935,04026.28019,71014.78211,0878.3156,2364,6773.5082,6311,9731.4801.110832624468CSoybeans351263198586169313,92028,12549,21936,91427,68620,76415.57311,6808,7606,5704.9273.6962,7722.0791,5591.169877658493370277208156117886649Ratio AnalysisDWheatE1051177411,025 150 acreUCC Ending196,875 half year rule147,656110,74283,05762.29246,71935,04026,28019,71014,78211,0878,3156,2364,6773,5082,6311,9731,4801.110.832624468351263198148FDepreciation Tax Saving4,219% of Sales Method7.3835,5374.1533,1152.3361,7521,31498573955441631223417513299745542312318C... +13107⠀4GHJInvestment Increase revenue After Tax Cashflow(225,000)14.14514.14514,14514.14514.14514,14514.14514.14514.14514.14514,14514,14514,14514,14514.14514.14514.14514.14514,14514.14514,14514,14514.14514.14514.145(187,031)19,40617,56016.17615,13814.35913,77513,33713,00912,76212.57812,43912.33512.25712.19912.15512,12212,09712,07912,06512.05412,04712.04112,03612,03312,031(9.522.41) NPVK▶ Understand the calculations in the spreadsheet "Tile Drainage". Which of thefollowing statement(s) is/are correct? Select all that apply.The tile drainage project will pay for itself in 10 years.The discount rate is 10%.Based on the current assumptions of 25 years useful life and 10 percent yieldincrease, Mr. Dietrich should not invest in the tile drainage project since the netpresent value (NPV) is negative.The net present value (NPV) will increase if the tile drainage could be effectivefor 50 years.

The spreadsheet does not indicate that the tile drainage project will pay for itself in 10 years.…

Understand the calculations in the spreadsheet "Tile Drainage". Which of the following statement(s) is/are correct? Select all that apply. The tile drainage project will pay for itself in 10 years. The discount rate is 10%. Based on the current assumptions of 25 years useful life and 10 percent yield increase, Mr. Dietrich should not invest in the tile drainage project since the net present value (NPV) is negative. The net present value (NPV) will increase if the tile drainage could be effective for 50 years.

Understand the calculations in the spreadsheet "Tile Drainage". Which of the following statement(s) is/are correct? Select all that apply. The tile drainage project will pay for itself in 10 years. The discount rate is 10%. Based on the current assumptions of 25 years useful life and 10 percent yield increase, Mr. Dietrich should not invest in the tile drainage project since the net present value (NPV) is negative. The net present value (NPV) will increase if the tile drainage could be effective for 50 years.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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