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

Exercise 3

Assume that owning and operating a certain machine to till 850 acres has an ownership cost of $5,000 per year, plus operating costs of $5.00 per acre including labor. Leasing a machine with a field capacity of 5.0 acres per hour to do the same work would cost $40 per hour, plus the same operating costs. Hiring the work done on a custom basis would cost $12 per acre. Which alternative has the lowest total cost