Eloisa Mae S.

Semilla 18-050242
BSABE 3A
ABE 131
Final Exam

1. A 100 inches wide combine traveling at 6 kph can empty its 1.5-ton grain tank in 3 minutes. The
combine is to work an area of 20 hectares with a field yield of 6 tons/ha. It is operating unloading
on-the-go and while in harvesting operation, the machine makes an overlap of 10% every time it
passes through a 500m headland to headland distance. It takes 10 seconds to turn at the
headland.
a. What is the efficiency of the machine? (10 points)
b. If the machine left 5% un-harvested every time it passes through headland to headland, what
will be the field efficiency? (20 points)
c. What would be the new field efficiency if the combine stopped to unload for the two
conditions (10% overlapped and 5% un-harvested)? (20 points)
2. An agricultural firm can invest into a 15-year project that will produce an annual revenue of
P200,000 per year. Initial investment required is P165,000, while yearly operating expenses will
be P145,000. Salvage value is 10% of the initial investment. Interest rate is 9.5%. Determine the
payback period, benefit cost ratio and interest rate of return for this opportunity. (50 points)

Table 18. Summary of the economic analysis

ITEM VALUE
Capital Investment (P) 165,000.00
Life of equipment (years) 15
Interest rate (%)* 9.50
Salvage Value (10% of initial investment) 16,500.00
Depreciation 9,900.00
Interest on investments 8,621.25
Tax and Insurance 4950
Repair and maintenance 16500
Total Fixed Cost (P/yr) 39,971.25
Total Variable Cost (P/yr) 145,000.00
Total Returns (P/yr) 200,000.00
Amortization (equal annual payment for 15 years) 11000

Payback Period (year) 10.98

Benefit Cost Ratio 1.13
Internal Rate on Return (%) 57.50