Q2: A farmer must decide what combination of seed, water, fertilizer, and pest control will be most profitable and environmentally conscious for the coming year. The local agricultural college did a study of this farmer's situation and prepared the following table. Plan Direct Cost/Acre Extra-market Cost/Acre Income/Acre A $750 $150 B 800 450 C 1000 250 D 1300 200 $1200 1400 1500 1650 The last page of the college's study was torn off, and hence the farmer is not sure which plan the agricultural college recommends. Which plan should the farmer adopt considering (Criteria: Maximizing the profit-Income-Cost): (a) only the direct costs, (b) both the direct and extra-market costs?
Q2: A farmer must decide what combination of seed, water, fertilizer, and pest control will be most profitable and environmentally conscious for the coming year. The local agricultural college did a study of this farmer's situation and prepared the following table. Plan Direct Cost/Acre Extra-market Cost/Acre Income/Acre A $750 $150 B 800 450 C 1000 250 D 1300 200 $1200 1400 1500 1650 The last page of the college's study was torn off, and hence the farmer is not sure which plan the agricultural college recommends. Which plan should the farmer adopt considering (Criteria: Maximizing the profit-Income-Cost): (a) only the direct costs, (b) both the direct and extra-market costs?
Chapter17: Property Transactions: §1231 And Recapture Provisions
Section: Chapter Questions
Problem 2RP
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Transcribed Image Text:Q2: A farmer must decide what combination of seed, water, fertilizer, and pest control will be
most profitable and environmentally conscious for the coming year. The local agricultural
college did a study of this farmer's situation and prepared the following table.
Plan Direct Cost/Acre Extra-market Cost/Acre Income/Acre
A
$750
B
C
D
800
1000
1300
$150
450
250
200
$1200
1400
1500
1650
The last page of the college's study was torn off, and hence the farmer is not sure which plan the
agricultural college recommends. Which plan should the farmer adopt considering
(Criteria: Maximizing the profit-Income-Cost):
(a) only the direct costs,
(b) both the direct and extra-market costs?
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