Question: Heather is considering adding replacing 3 2 0 acres of edible green peas with 3 2 0 acres of red lenfils. On their remaining 1
Heather is considering adding replacing acres of edible green peas with acres of red lenfils. On
their remaining acres, they will seed acres to Canola and to Feed Barley. They use a
custom harvester to harvest all their acres. The rate for custom combining in their area is $ per acre.
They want to use a parfial budget to see the financial impacts of this change. Below is a table of
historical and projected costs for the crops Heather has grown and harvested recently, along with
projected costs and expenses for.
Crop Per acre yield
Historical or
Expected
Expected Price Per acre variable
costs
Per acre overhead
costs
Canola bu
Feed Barley bu
HRS Wheat bu
Red Lenfils lbs lb
Edible Green Peas bu
Oats bu
a Construct a parfial budget that outlines this proposed change.
b How does this change affect per acre profitability?
c Should Heather make this change? Why or why not?
d At what yield per acre of the new crop would Heather be indifferent between these choices?
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