A farmer has been given the opportunity to become a part owner in a local fertilizer business. If the farmer becomes an owner of the fertilizer business, he will receive $5,000 each year from the firm's profits. In addition, the farmer will receive a discount on fertilizer and he believes the discount will reduce his fertilizer costs by $2,000 per year. The farmer plans to retire in 20 years and thinks he can sell his equity in the fertilizer business for $60,000.(i) Calculate the market value of this investment if the market rate of return on comparable investments is 15%a. $43,815b. $47,481c. $103,815d. $68,514e. None of the above
