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Currently you own and farm 950 acres of wheat. Your neighbor Frank has offered you...

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Accounting

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Currently you own and farm 950 acres of wheat. Your neighbor Frank has offered you the opportunity to rent 300 acres of his farm for $55 per acre. You expect Frank's operating costs to be 10x higher than the costs on your 950 acres of wheat. Your operating costs on your 950 acres of wheat is $185. 00 per acre. Frank's land is somewhat better than yours and you erpect to get a yield of 55 bushels per acre on Frank's land phe yield on your 950 acres of whest is 33 bu per acre). Frank's land will also provide a small grain pasture benefit that you estimate at $38 per acre. Frank will only let you ise 13 of the land for pasture. You will need to farm the land at night and on weekenda and you estimate that this will cost you 500 hours of lost work from your job at the local mill where you eamn a wage of $17.00 per hour in this rental agreement, Frack will pyy for 2/3 of the production conts and will take 3/5 of the grain revenue. The price of wheat is $5.00 per bu. NotE: Ignore any changes in repair, depreciation. or interest costs from increased equipment use. What is the value of A

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