Calculate the partial budget for the farmer who is switching from Rain fed Tomato to Irrigated...

 

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Calculate the partial budget for the farmer who is switching from Rain fed Tomato to Irrigated Tomato cultivation. Farmer currently farms 2ha of Rain fed Tomato and planning to convert the whole 2ha to Irrigated Tomato. To do this, farmer needs irrigation equipment valued at $60,000, a salvage value amounts to $6,000 and expected to last up to 10 years. The additional insurance premium cost amounts to $600/annum. The Rain fed Tomato has a yield level of 0.50 tons/ac and Irrigated Tomato expected to yield 1.50 tons/ac. The levels of input used in the production of Tomato under respective situations are furnished below. Inputs Fertiliser Fuel & Chemicals Labour Rain Fed Tomato $100/ac $70/ac $220/ac Irrigated Tomato $120/ac $100/ac $300/ac Calculate the partial budget for the farmer who is switching from Rain fed Tomato to Irrigated Tomato cultivation. Farmer currently farms 2ha of Rain fed Tomato and planning to convert the whole 2ha to Irrigated Tomato. To do this, farmer needs irrigation equipment valued at $60,000, a salvage value amounts to $6,000 and expected to last up to 10 years. The additional insurance premium cost amounts to $600/annum. The Rain fed Tomato has a yield level of 0.50 tons/ac and Irrigated Tomato expected to yield 1.50 tons/ac. The levels of input used in the production of Tomato under respective situations are furnished below. Inputs Fertiliser Fuel & Chemicals Labour Rain Fed Tomato $100/ac $70/ac $220/ac Irrigated Tomato $120/ac $100/ac $300/ac

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