Farm Management 7th Edition by Ronald Kay , William Edwards,Patricia Duffy

Exercise 7

Assume you would like to make an investment in agricultural land in your area. Determine local land prices, cash rental rates, and the cash expenses you would have as the land owner. Construct a 5-year cash flow budget for the investment, assuming 60 percent of the purchase price is borrowed with a 20-year loan at 10 percent interest. Would the investment be financially feasible without some additional source of cash inflow