Report Part a) Summary of Cost-Volume-Profit AnalysisPart b) Reporoduce and summerize the...

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Report  Part a) Summary of Cost-Volume-Profit AnalysisPart b) Reporoduce and summerize the resultMaking use of tractor to do agricultural mechanized operations is responsible for a fundamental and important role to mechanize agricultural section. Replacement of farm machinery with a new similar machine is one of the most important objects of farm machinery management. Decision making about replacement of used farm equipment with a new similar one is one of the important items in farm machinery management. Proper performance in this case can lead to timely, high quality farm operations which in turns results in considerable decrease in product expenditures and also more income. Based on that the study in order to determine optimum life or economic life for MF285 in west region of Isfahan province was performed. Listed price of tractor, annual depreciation and Internal Rate of Return (I.R.R) in the study period were calculated. These items accompanied by their repair and maintenance cost were used to determine their economic life. Finally replacement time for the study tractor 18316 hours was predicted.        
	
Document Preview: American-Eurasian J. Agric. & Environ. Sci., 4 (1): 81-85, 2008
ISSN XXXXXXXXXX
© IDOSI Publications, 2008
Determination of Optimum Life (Economic Life) for Mf285 Tractor:
A Case Study in Center Region of Iran
G. Khoub Bakht, H. Ahmadi, A. Akram and M. Karimi
Department of Agricultural Machinery, Faculty of Biosystems Engineering, University of Tehran, Iran
Abstract: Making use of tractor to do agricultural mechanized operations is responsible for a fundamental and
important role to mechanize agricultural section. Replacement of farm machinery with a new similar machine is
one of the most important objects of farm machinery management. Decision making about replacement of used
farm equipment with a new similar one is one of the important items in farm machinery management. Proper
performance in this case can lead to timely, high quality farm operations which in turns results in considerable
decrease in product expenditures and also more income. Based on that the study in order to determine optimum
life or economic life for MF285 in west region of Isfahan province was performed. Listed price of tractor, annual
depreciation and Internal Rate of Return (I.R.R) in the study period were calculated. These items accompanied
by their repair and maintenance cost were used to determine their economic life. Finally replacement time for
the study tractor 18316 hours was predicted.
Key word: Economic life  Replacement time  cost  MF285 
INTRODUCTION operating of farm machinery represent 35 to 50% of the
costs of agricultural production when excluding the land
Today, tractor is one of the most important power [8]. The R&M (repair and maintenance cost) is an
sources in agriculture. Effect of tractor power on important item in costs of owning and operation. In
agriculture is considerable [1]. The use of modern general, the costs other than those for R&M usually
technology during latter decades resulted in rapid growth decrease with increasing usage, but the reverse is true
of...

Robert · Accepted Answer

Part a) Summary of Cost-Volume-Profit Analysis 
The question of this study is how and when to replace an agricultural machinery. Decision for 
replacing old machinery with new machinery is performed based on its economic life, which is 
also known as optimum life, having direct relation with repair and maintenance costs. Cost of 
owning and operating of farm machinery represent about 35 to 50% of overall agricultural 
production costs. The repair and maintenance cost is an important component in the costs of 
owning and operation. Generally, costs other than repair and maintenance cost decrease with 
increasing usage, but repair and maintenance costs moves other way round i.e. it increases with 
increasing usage. Each machine has determined economical life and thereafter using machinery 
will not be economical. Also it is known that repair and maintenance cost has a large share in 
machine ownership costs. The economic life of a machine/tractor will be that age at which total 
annual machine costs are minimized,

Report Part a) Summary of Cost-Volume-Profit Analysis Part b) Reporoduce and summerize the result Making use of tractor to do agricultural mechanized operations is responsible for a fundamental and...

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