A South American farms 960 hectares of land on which he grows squash, kale, lettuce and beans.

Question:

A South American farms 960 hectares of land on which he grows squash, kale, lettuce and beans. Of the total, 680 hectares are suitable for all four vegetables, but the remaining 280 hectares are suitable only for kale and lettuce. Labour for all kinds of farm work is plentiful.
The market requires that all four types of vegetable must be produced with a minimum of 10 000 boxes of any one line. The farmer has decided that the area devoted to any crop should be in terms of complete hectares and not in fractions of a hectare. The only other limitation is that not more than 227 500 boxes of any one crop should be produced.
Data concerning production, market prices and costs are as follows:

Fixed overhead per annum:
Growing.................... 122 000
Harvesting.................... 74 000
Transport.................... 74 000
General administration... 100 000
Notional rent....................74 000
It is possible to make the entire farm viable for all four vegetables if certain drainage work is undertaken. This would involve capital investment and it would have the following effects on direct harvesting costs of some of the vegetables:

The farmer is willing to undertake such investment only if he can obtain a return of 15 per cent
DCF for a four-year period.
You are required to:
(a) Advise the farmer, within the given constraints:
(i) the area to be cultivated with each crop if he is to achieve the largest total profit;
(ii) the amount of this total profit; (iii) the number of hectares it is worth draining and the use
to which they would be put.
(b) Comment briefly on four of the financial dangers of going ahead with the drainage work.
Show all relevant calculations in arriving at your answer. Ignore tax and inflation.