John Deere Employee Purchase Plan Rebate - DOC

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                  AS&D 2113 – Applied Agricultural Analysis
                        Final Project & Final Exam
        This is your final project as well as your final exam for AS&D 2113 – Applied Agricultural
Analysis. The following problem is the first portion of the project. You are required to solve the
problem on your own, and show all hand calculations on separate sheets of paper. After you have
solved the following problem you will be required to manage and calculate your data in Microsoft
Excel and create a Power Point presentation that presents the problem and solutions (Power Point
should be six slides minimum). You have been instructed on numerous skills in both programs, it is
suggested that you include all of the bells and whistles. The problem, written calculations, Excel
worksheets, and Power Point are due on Friday, April 30th @ 8am. Presentations conducted during the
scheduled final exam period.

         You are a small grain producer in the “Big Country” region of Texas. Most of your acreage is
in small grain, although you do have some irrigated land in corn production. This is an exciting year
for you because you have been profitable for the past two years and now are able to purchase some
new equipment. You have decided to invest in planting equipment this year because your current grain
drills are in dire need of replacement. One model that you plan to purchase is a Great Plains 10’ end-
wheel no-till drill, model number 1005.
         Before the new equipment can be utilized it must be calibrated for use with your current
practices. Also, during planting season many equipment challenges and malfunctions occur that
impede progress. Finally, many questions must be answered related to production in order that you
maintain a high level of efficiency.

Materials Provided:
       1. Great Plains – Model 1005
          End-Wheel No-Till Drill
          Operator’s Manual

Helpful Information:
       1.   1 Acre = 43,560 sq ft.
       2.   1 Acre = 4,840 sq yds.
       3.   1 Mile = 5280 ft.
       4.   1 Bushel = 1.25 Cu ft.
       5.   1 Bushel Wheat = 60 #
                                Purchasing New Equipment:
       You are in the process of purchasing a new grain drill and have settled on a model for purchase.
You have a John Deere 8300 that you will use as a trade-in and there are rebates available on the
model you wish to purchase. The salesman has developed a purchase and payment finance plan based
upon a 36 month payoff at 7.9% APR (Next page). Unfortunately, you do not have the capital for this
option. Answer the questions based upon the information given below, ordinary simple interest, and a
48 month payoff at 8.1% APR. Use the following formula to determine the interest on the grain drill’s
“Amount Financed/Lease Sales Price”.

  Interest = principal x interest rate x time in years                             - OR - I = prt

  The salesman says that you must use the following information if you finance over 48 months at 8.1% APR.
                  The remainder of the information for the purchase will remain the same.
       Minimum Down Payment                  Rebate Change               PDI Insurance Change
             $1000.00                           $750.00                         $575.86

Answer the following questions:

   1. Complete the “Option 2” chart on the back of this page using a finance period of 48 months at
      8.1% APR and the information above. Complete all blanks utilized for Option 1.

   2. How much will your finance charges
      (interest) be for Option 1?

   3. How much will your finance charges
      (interest) be for Option 2?

   4. What will the total payoff difference be
      between Option 1 and Option 2?
         Pre-Planting Land Preparation – Removing Plant Residue:
While your new planting equipment is being calibrated several other of your employees are preparing
land for planting. You and your team decide to convert 350 acres of irrigated corn land into wheat.
One of your employees is using a 30’ rotary cutter to chop the corn stubble. He is able to drive 7.8
mph. He uses 1.2 gallons of diesel fuel per acre at a cost of $1.28 per gallon.


              1. How many hours will it take to complete the job if no stops are made?

              2. How many gallons of diesel fuel are consumed?

              3. If you paid that employee $7.45/hr, what did it cost in fuel and salary to complete
                 the job?

                    Pre-Planting Land Preparation – Cultivation:
Following the removal of the corn stalks another employee disks the 350 acres with a 24’ disk plow.
He is able to disk 11.13 acres per hour with a fuel cost of $66.40 per hour.


              1. How many hours does it take to disk the 350 acres if no stops are made?

              2. How much does it cost to disk the 350 acres if you consider fuel and labor costs if
                 your employee is paid at a rate of $6.80/hour?

              3. What is the cost per acre?
                    Planting Converted Irrigated Corn Acreage:
Because larger planting equipment is being used in different areas, you are forced to plant the 350
acres of converted irrigated corn acreage with the 10’ Great Plains – Model 1005 End-Wheel No-Till
Drill. The wheat is planted 1.5” deep. The drill is calibrated for 91 lbs of hard red winter wheat per
acre. Wheat is sold in 50 lb bags.


               1. How many bags of wheat were used to plant the 350 acres?

               2. How many bushels of wheat were planted?

               3. If the drill is calibrated for 91 lbs. per acre, what are the row spacing set at?

               4. What is the seed rate handle setting?

               5. What is the proper position for the seed cup doors

               6. What is the drive type setting for the calibration? Draw an illustration of the drive

                    Equipment Repair and Costs to Production:
During planting of the 350 acres the new drill broke down and was in the shop for 1 1/2 days. It took 9
3/4 hours to repair the drill at $48.50 per hour for labor. The mechanic replaced $742.28 worth of
parts. You and your partners estimate that it cost you $15 per hour in labor and production costs for
not having the use of the drill. The employee who would have been operating the drill works 10-hour


               1. How much was the labor costs for the repair?

               2. What was the total repair bill?

               3. What was the total cost of having the drill out of production?
                         Analyzing Wheat Production Trends:
You are the president of your local producer’s coop and are required to give production reports to the
members of the cooperative in order to keep them educated about nation-wide wheat production. You
discovered the following table while conducting research on the National Association of Wheat
Growers (NAWG) website. The data in the table are of the wheat production in the NAWG states in
2003. The table gives area harvested (in thousands of acres) and yield (in bushels per acre).

                           Wheat Production in NAWG States in 2003
State       Area Harvested   Yield                State       Area Harvested                Yield
            (x 1000 acres)   (bu/ac)                          (x 1000 acres)                (bu/ac)
AR          920              56                   ND          8,657                         28
AZ          85               98                   NE          200                           48
CA          455              83                   NM          270                           38
CO          2,450            44                   OH          1,030                         70
ID          1,350            77                   OK          4,300                         35
KS          9,200            47                   OR          783                           44
KY          410              60                   SD          3,024                         40
MD          200              60                   TX          3,400                         36
MN          1,990            40                   VA          240                           57
MT          5,320            29                   WA          2,290                         54
NC          580              49                   WY          193                           33


               1. Use the table to create two bar graphs in Excel, one of the area harvested and the
                  other of the yield on the next page. Place the states on horizontal axis (X-axis) and
                  the area/yield one the vertical axis (Y-axis).

               2. Which state had the largest number of harvested acres?

               3. What was the total number of bushels harvested in the state with the largest number
                  of harvested acres?

               4. At $2.58 per bushel, how much did Texas producers receive for wheat in 2003?

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