Question 1. Assume that owning and operating a certain machine to till 850 acres results in 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?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?
Question
1. Assume that owning and operating a certain machine to till 850 acres
results in 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?
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