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Bid Price per Head for Beef Cow Herd Template
Texas Agricultural Extension Service
Authors: James McGrann
Larry Falconer
Nathan Green
John Parker
Programmers: Clay Kolle Version: 11/16/2001
First locate the Cow Bid Price menu bar that should be
located directly beneath the main toolbar. Use the "View" drop-
menu to navigate to specific sections of the program. Use the "Print"
menu item to take advantage of preset printing options.
Template
rsion: 11/16/2001
hould be
iew" drop-down
Use the "Print"
g options.
Bid Price for Beef Cows Including Financing and Tax Implications
Date Printed 8-Dec-11
Steer Weight (Pounds) 475 Cull Cow Sale Weight (Pounds) 950 Lb.
Heifer Weight (Pounds) 450 Marginal Income Tax Rate 28.00 % Net Present
Cow Price ($/Head) $1,350 Capital Gains Tax Rate 20.00 % Value*
Expected Number of Self Employment Tax Rate 15.30 % $120.03
Calving Opportunities 7 Discount Rate 10.00 %
Year 2006 2007 2008 2009 2010 2011 2012
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
Calf Crop or Weaning % 100 85 85 85 85 85 85
Steers Price ($/Cwt) $130 $130 $130 $130 $130 $130 $130
Heifer Price ($/Cwt) $124 $124 $124 $124 $124 $124 $124
Cull Cow Price ($/Cwt) $58.76 $58.76 $58.76 $58.76 $58.76 $58.76 $58.76
Gross Receipts (Calf Sales) $588 $500 $500 $500 $500 $500 $500
Cow Operating Cost/Year $150 $300 $300 $300 $300 $300 $300
Net Above Operating Cost $438 $200 $200 $200 $200 $200 $200
Financial Information
Equity Requirement (%) 30.00 Equals $405.00 Per Head
Length of Note (Years) 3
Interest Rate (%) 8.00
Totals
Interest Payment $75.60 $52.31 $27.16 $0.00 $0.00 $0.00 $0.00 $155.07
Principal Payment $291.09 $314.38 $339.53 $0.00 $0.00 $0.00 $0.00 $945.00
Debt Service Requirement $366.69 $366.69 $366.69 $0.00 $0.00 $0.00 $0.00
Depreciation % 10.00 20.00 20.00 20.00 20.00 10.00
Depreciation Expense $135.00 $270.00 $270.00 $270.00 $270.00 $135.00 $0.00
Taxable Income $227.40 ($122.31) ($97.16) ($70.00) ($70.00) $65.00 $200.00
Income Taxes $63.67 ($34.25) ($27.20) ($19.60) ($19.60) $18.20 $56.00
Self Employment Taxes $34.79 $0.00 $0.00 $0.00 $0.00 $9.95 $30.60
Cash Flow Available
for Debt Service $339.54 $234.25 $227.20 $219.60 $219.60 $171.85 $113.40
Net Cash Flow ($27.15) ($132.44) ($139.49) $219.60 $219.60 $171.85 $113.40
Tax Basis in Cow $1,215.00 $945.00 $675.00 $405.00 $135.00 $0.00 $0.00
Cow Salvage Value $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $558.22
Salvage Value (After Tax) $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $446.58
Tax Adjusted Discount Rate 7.20
Cash Flows
Net Present
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Value
($405.00) ($27.15) ($132.44) ($139.49) $219.60 $219.60 $171.85 $559.98 $120.03
*Comments regarding this investment scenario.
The positive net present value indicates this is an economically feasible investment.
This investment has an internal rate of return of 10.9%.
This investment has a payback period of seven years.
This investment may not be financially feasible due to negative cash flow in year one.
Analysis Section
seven This investment has a payback period of seven years.
0.645885926
10.9
one This investment may not be financially feasible due to negative cash flow in year one.
$291.09 $314.38 $339.53 $0.00 $0.00 $0.00 $0.00
($405.00) -25.32649 -115.247 -113.2293 166.285 155.11665 113.235 344.1961
Filename 26f9161d-f28f-4e9a-bfb2-7c3cd3dbad00.xls 12/8/2011 , 10:23 PM Report Page 1 of 1