Q2: A farmer must decide what combination of seed, water, fertilizer, and pest control will bemost profitable and environmentally conscious for the coming year. The local agriculturalcollege did a study of this farmer's situation and prepared the following table.Plan Direct Cost/Acre Extra-market Cost/Acre Income/AcreA$750BCD80010001300$150450250200$1200140015001650The last page of the college's study was torn off, and hence the farmer is not sure which plan theagricultural college recommends. Which plan should the farmer adopt considering(Criteria: Maximizing the profit-Income-Cost):(a) only the direct costs,(b) both the direct and extra-market costs?

The plan which has the highest or maximum profit should be adopted by the farmer as the criteria for…

Answered: Q2: A farmer must decide what…

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter14: Property Transactions: Capital Gains And Losses, § 1231, And Recapture Provisions

Section: Chapter Questions

Problem 3RP

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1. A farmer has recently acquired a 110 hectares piece of land. He has decided to grow Wheat and barley on that land. Due to the quality of the sun and the region’s excellent climate, the entire production of Wheat and Barley can be sold. He wants to know how to plant each variety in the 110 hectares, given the costs, net profits and labor requirements according to the data shown below: Variety Cost(Price/Hec.) Net Profit (price/Hec.) Man-days/Hec. Wheat 100 50 10 Barley 200 120 30 The farmer has a budget of US$10,000 and availability of 1,200 man-days during the planning horizon. In addition, the farmer would like to get a profit of at least $3000. Generate the mathematical model for the optimal usage of land area to produce wheat and barley. Using a graphical method to optimize land usage, how many hectares are to be used for wheat and barley.
Required: If Nelie’s Nursery wishes to earn a before-tax profit of $30,000 on this type of flower, how many flowers must be sold to landscapers?
h.- Suppose that there is a choice to make between three lands to purchase. Land-A purchase price is $150K. Land-B purchase price is $120K but there is a 30% chance that some extra administrative tasks at a cost of $40K will be needed. Land-C purchase price is $80K but there is a 70% chance that you need to construct a road with an estimated cost of $80K. Develop a decision tree to estimate the final costs for each of the lands. Which land you would recommend?
QUESTION 1 1. (14 MARKS) The Majestic Mulch and Compost Company (MMCC) is investigating the feasibility of a new line of power mulching tools aimed at the growing number of home composters. Based on exploratory conversations with buyers for large garden shops, MMCC projects unit sales as follows: UNIT SALES YEAR 1 2 3 4 5 6 3,000 5,000 6,000 6,500 6,000 5,000 4,000 3,000 7 8 The new power mulcher will sell for $120 per unit to start. When the competition catches up after three years, however, MMCC anticipates that the price will drop to $110.The power mulcher project will require about 20% of the first year sales revenue in net working capital at the start. The variable cost per unit is $60, and total fixed costs are $25,000 per year. It will cost about $800,000 in total to buy the equipment necessary to begin production. This investment is primarily in industrial equipment, which qualifies as seven-year MACRS property. The equipment will be worth about 20 percent of its cost in eight…
There are five alternatives for improvement of the local farm to market road. Determine which alternative should be chosen if the highway department is willing to invest money as long as there is a B/C ratio of at least 1.00. Alternatives Annual Benefits Annual Cost 1 900,000 1,000,000 2 1,300,000 1,400,000 3 2,800,000 2,100,000 4 3,300,000 2,700,000 5 4,200,000 3,400,000
2. Investing in Electrical Efficiency Two pumps capable of delivering 100 hp to an agricultural application are being evaluated in a present economy study. The selected pump will only be utilized for one year, and it will have no market value at the end of the year. Pertinent data are summarized as follows: Purchase price Maintenance cost Efficiency АВС Pump $2,900 $170 XYZ Pump $6,200 $510 80% 90% If electric power costs $0.10 per kWh and the pump will be operated 4,000 hours per year, which pump should be chosen? Recall that 1 hp = 0.746 kw.
A corn farmer has a revenue insurance policy that guarantees a revenue level of $925 per acre. The table below provides the risk profile for the farmer. Complete table below by calculating the indemnity payment for each weather condition scenario, and then calculate the fair premium for the policy. Yield Price Revenue Weather Revenue Insurance Probability Conditions (bushels/acre ($/bushel) ($/acre) Indemnity Drought (very dry) 0.05 95 $8.00 $760 0.10 Dry 135 $6.50 $878 Flooding (very 0.05 150 $6.00 $900 wet) 0.10 Wet 190 $5.00 $950 0.5 Normal 210 $4.80 $1,008 Above 0.15 240 $4.00 $960 Average 0.05 Excellent 280 $3.50 $980 Fair Premium =
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If the farmer uses pesticides he expects a crop of 60,000 bushels; if he does not use pesticides he expects a crop of 50,000 bushels. The cost of pesticides is $30,000 and the other costs associated with planting and harvesting the crop total $450,000. The price of corn at harvest time will either be $9.00 with probability of 0.50 or it will be $11.00 with probability 0.50, so if the farmer decides to sell the crop at harvest, the expected price per bushel that he will receive is $10.00. If the farmer uses pesticide and decides to sell the crop at harvest, what is his expected profit? a. $120,000.00 b. $150,000.00 c. $180,000.00 d. $20,000.00
In this part of the project, you will be purchasing the home you chose in the Budget Project. You will need to obtain a loan from a financial institution since you cannot pay cash for your home. You will be researching three different loan scenarios and determining which loan option best fits your situation and needs. Purchase price of the home you chose from the Budget Project: ________$431,873______ Part 1: Financing your home Loan Scenario 1: In this scenario, your financial institution is offering you a 30-year fixed mortgage with a 20% down payment at a 3.43% fixed rate. Determine the following: Calculate the down payment for this loan. How much will you need to finance from the bank for this loan? What is your monthly payment? Use technology or the monthly payment formula in your text to get the monthly payment for this loan. What is the total cost of the loan over 30 years? How much of this cost is interest? What is the total you will expect to pay at closing for this loan…
Whispering Company owns a 7,000-acre tract of timber purchased in 2006 at a cost of $1,417 per acre. At the time of purchase, the land was estimated to have a value of $317 per acre without the timber. Whispering Company has not logged this tract since it was purchased. In 2020, Whispering had the timber cruised. The cruise (appraiser) estimated that each acre contained 8,720 board feet of timber. In 2020, Whispering built 10 miles of roads at a cost of $8,400 per mile. After the roads were completed, Whispering logged and sold 3,815 trees containing 926,500 board feet. (a) Your answer is correct. Determine the cost of timber sold related to depletion for 2020. (Round answer to 0 decimal places, e.g. 5,125.) (b) Cost of timber sold $ eTextbook and Media Your answer is correct. Depreciation expense $ 116875 If Whispering depreciates the logging roads on the basis of timber cut, determine the depreciation expense for 2020. (Round answer to 0 decimal places, e.g. 5,125.) eTextbook and…
A grower is developing a new tree farm. Using only the available data shown below, determine which of the following are true: I If a grower wishes to harvest trees at 5 years, the grower should plant Species A. II If a grower wishes to harvest trees at 5 years, the grower should plant Species B. III If a grower wishes to harvest trees at 10 years, the grower should plant Species A. F() () ha Species A • Species B Species C t(years) 30 23 5 10 15 20

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