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Combine Harvester Example (Buy or Lease)

Combine Harvester Example (Buy or Lease) - $8.75 per hour...

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Combine Harvester Example (Buy or Lease) Source: http://www.ext.colostate.edu/pubs/farmmgt/03759.html A farmer is considering buying a new combine rather than hiring a contract harvester. The purchase price of the new combine is $200,000 and it is expected to last 15 years. The new combine will cost
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Unformatted text preview: $8.75 per hour operate and the farmer can harvest 5 acres per hour. The contract harvester charges a flat rate of $16.00 per acre. How many acres must be harvested per year to justify the cost of the new combine? Assume a 6% MARR....
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