Machinery Replacement Strategies with Supporting Software

Until now, techniques for analyzing machinery replacement decisions have not kept pace with the technology of machinery design and development. While machinery design improves almost annually, information to provide a similar level of technology for replacement decisions has been almost nonexistent...until now. This book is designed to bring together two important aspects of a machinery replacement decision. First, it offers a real world comparative cost analysis of machinery replacement alternatives: repair and keep using your present machine; trade for a new machine; trade for a used machine; rent or lease a machine; or use a custom operator. It allows an owner to determine the best time to trade, or consider the size and number of machines to own. The comparative analysis is based on net unit cost (i.e., cost per acre or cost per hour of use). Net unit cost simulates your cash flow over a specified period of time. It includes such important considerations as income tax credit and timeliness costs. Second, it develops an analysis of your financial situation to help determine the feasibility of each alternative. The financial analysis includes consideration of new family income; cash flows; debt obligations; and machinery loans. References are provided throughout the book and in the appendix that helps you adept depreciation, repairs, and timeliness costs that apply to your own situation. The final product is the selection of the best alternative that can be financially supported from your farm income. Its own software for computer users supports this book. You can even print the results in a format that will support a loan application to finance replacing or repairing your equipment.