Closing Case Chapter 9

# Closing Case Chapter 9 - (1+.10)35-1=2,710.24% The value of...

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Closing Case Chapter 9 Bunyan Lumber, LLC The initial cost of the land, an opportunity cost, is: 7,500(\$1,000)=\$7,500,000 The first cash flow is the thinning. The next will occur 20 years from today, 25 years after the first harvest and 35. Thinning cash flow is: 7500(1,200)- \$9,000,000 Thinning and subsequent harvesting cash flows occur on a 20 year interval,we ned the effective 35 year interest rate
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Unformatted text preview: (1+.10)35-1=2,710.24% The value of all thinning beginning in the second year at year 25 is: PV=7,500,000 + 9,000,000/27.1024= \$78,320,739.12 Value of thinning today: N= 20 I/Y= 10% PV= 320,739.12 FV= \$78,320,739.12 Revenue and costs Revenue Tractor Road Sale prep Income statement Revenue Tractor Cost Road Sale Prep & admin Excavator Broadcast Site Prep Planting EBIT Taxes Net Income...
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## This note was uploaded on 07/12/2009 for the course FINANCE BUS650 taught by Professor Rayford during the Spring '09 term at Ashford University.

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