Twilight Acre Farms
(3 pages of text)
At the end of the harvest season, the owner of a family-owned farm had to decide whether to purchase a new combine or perform significant repairs on the existing machine. He realized that the decision needed to be made before the next harvest season, but was unsure of which option would best fit the company. This case outlines a simple capital budgeting decision in the farming industry. It can be used to educate individuals on the farming industry with concepts required to make an investment decision.
This case is intended to be used in the capital budgeting section of an introductory accounting or finance course. Quantitatively, the case provides an opportunity to perform a trade-off analysis on a future investment. It allows students to perform net present value calculations and determine the profitability of this particular investment. The case provides an excellent platform for looking at the qualitative side of decision making. Students must understand both the short- and long-term goals of Twilight Acre Farms. Also, students must weigh the pros and cons of each alternative to determine the appropriate choice.
Agriculture, Forestry, Fishing and Hunting
Canada, Small, 2004
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