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Capital repairs and expenditures
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dogg4585
Posted 1/26/2024 11:46 (#10594407 - in reply to #10594385)
Subject: RE: Capital repairs and expenditures


sc ks
The only ship that doesn't sale is a partnership.
Hiring work done or running older equipment is a good way to not get overextended and to overcome

1. Depreciation
2. Big ticket repairs
3. Opportunity cost of capital (add up value of your machinery and multiply by 5.3% currently, or more if borrowed money).

If eqpt is worth 1M and paid for, you're likely paying
50k in lost interest income currently (85k avg in stock market or land)
50k in deprec most years
30k in repairs/insurance most years
30k in labor to run said eqpt

So about $80/ac on a 2k acre farm. Your mileage may vary
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