Question

In: Economics

A farmer is building a new machine shed on his farm. Calculate the average annual fixed...

A farmer is building a new machine shed on his farm. Calculate the average annual fixed cost for the machine shed using the information given below. The annual fixed costs or ownership costs are depreciation, interest, taxes, and insurance.

Purchase price = $180,000

Salvage value = $0

Useful life = 20 years

Property taxes = $5,200

Insurance = $5,500

Cost of capital = 9%

Solutions

Expert Solution

Annual fixed cost = 180000 * (A/P,9%,20) + 5200 + 5500

= 180000 * 0.109546 + 5200 + 5500

= 30418.37

Rahul Sunny answered 2 years ago
Next > < Previous

Related Solutions

Suppose a farmer is interested in developing a breeding program on his chicken farm. The farmer...
Suppose a farmer is interested in developing a breeding program on his chicken farm. The farmer would like to artificially select for egg weight, egg shape, shell color, and shell thickness. In a large population of his chickens, the farmer has measured these four continuous egg traits of interest and calculated their variances, shown in the table below. Variance Weight Shape Shell Color Shell Thickness Phenotypic 166 1043 157 176 Additice Genetic 4 140 83 22 Environmental 83 522 95.4...
Bob the Farmer grows vegetables at his farm in South Dakota. He grows his vegetables for...
Bob the Farmer grows vegetables at his farm in South Dakota. He grows his vegetables for sale to food companies. On November 1, he sells his vegetables to Granny’s Pie Company for $65,000, inclusive of 13% VAT. Granny’s Pie Company uses his vegetables to produce savory meat and vegetable pies (they’re huge in the UK). After the production of the pies is complete, Granny’s Pie Company sells the pies to Winn Dixie Grocery Stores for $140,000, inclusive of 13% VAT....
Bob the Farmer grows vegetables at his farm in South Dakota. He grows his vegetables for...
Bob the Farmer grows vegetables at his farm in South Dakota. He grows his vegetables for sale to food companies. On November 1, he sells his vegetables to Granny’s Pie Company for $65,000, inclusive of 13% VAT. Granny’s Pie Company uses his vegetables to produce savory meat and vegetable pies (they’re huge in the UK). After the production of the pies is complete, Granny’s Pie Company sells the pies to Winn Dixie Grocery Stores for $140,000, inclusive of 13% VAT....
#2. Farmer Brown sold the mineral rights on his farm to Exxon Corporation in exchange for...
#2. Farmer Brown sold the mineral rights on his farm to Exxon Corporation in exchange for payments of $14,000 per year in perpetuity. Using a discount rate of 6.5 percent, compute the present value of this arrangement #3. Investment X has the following projected cash flows over the next four years: Year Amount 1 $5700 2 $4900 3 $4300 4 $2000 If the opportunity cost for an investment of this level of risk is 9.1%, what is the most that...
A farmer records the number of bees spotted on his farm over a two week period...
A farmer records the number of bees spotted on his farm over a two week period in the middle of the summer. Below is a stem and leaf plot of his data: 1 67 2 269 3 29 4 399 5 4 6 14 7 8 7 key: 1 6=16 1) Find the mean, median, mode, and sample standard deviation for this data 2) List the values for your Five Number Summary for the data in order. 3) Identify any...
(10 marks) A farmer has discovered that on his farm, he can get 30 bushels of...
A farmer has discovered that on his farm, he can get 30 bushels of corn per acre if he applies no fertilizer. When he applies N pounds of fertilizer to an acre of land, the marginal product of fertilizer is 1−N/200 bushels of corn per pound of fertilizer. (a) If the price of corn is $3 a bushel and the price of fertilizer is $p per pound (where p < 3), how many pounds of fertilizer should be use per...
A farmer weighs 10 randomly chosen watermelons from his farm and he obtains the following values...
A farmer weighs 10 randomly chosen watermelons from his farm and he obtains the following values (in lbs): 7.72,9.58,12.38,7.77,11.27,8.80,11.10,7.80,10.17,6.00 Assuming that the weight is normally distributed with mean μ and and variance σ2, find a 95% confidence interval for μ.
Scenario Tim is a 40-year-old sustainable farmer who works daily in his farm fields. After a...
Scenario Tim is a 40-year-old sustainable farmer who works daily in his farm fields. After a long day getting his fields ready for planting, he comes in and falls into bed, exhausted. The next morning as he’s taking a shower, he feels a small lump on the back of his leg, behind his knee. Since he can’t really see it, he dries off and asks his wife to look at it. Initially she thinks it looks like a scab, but...
A farmer is interested in finding a new strain of alfalfa to grow on his land....
A farmer is interested in finding a new strain of alfalfa to grow on his land. He finds six new varieties and divides his land into thirty equally sized plots, with five randomly chosen plots for each strain. Strain   Yield A   1849 A   1430 A   2389 A   1920 A   2145 B   1943 B   2354 B   1990 B   2063 B   2390 C   1791 C   2125 C   1084 C   1620 C   2033 D   2179 D   1846 D   1938 D   1410 D   1983...
A farmer has decided to use a new additive to grow his crops. He divided his...
A farmer has decided to use a new additive to grow his crops. He divided his farm into 10 plots and kept records of the corn yield (in bushels) before and after using the additive. The before (first row) and after (second row) results from the 10 different plots are shown below. Corn Yield Before 9 9 8 7 6 8 5 9 10 11 After 10 9 9 8 7 10 6 10 10 12 You wish to test...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT