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Creation of working capital
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kst1
Posted 9/26/2021 09:25 (#9239127 - in reply to #9239113)
Subject: RE: Creation of working capital


It's not that I'm not making progress, just trying to push it forward faster lol. But since you brought it up, here's a rough example of part of what I'm looking at from an ownership cost standpoint...

I farm 1,000 acres and have a tractor payment due that is 10,000/year so it costs me $10/acre out of pocket to own it for the next 3 years.

I pick up another 500 acres so now I'm farming 1500. Tractor now costs me 6.66/A to own for 3 more years. But I can refinance for another 5 years and jump to a 15,000/year payment and still have an ownership cost of $10/acre. Doesn't affect my breakeven any, but I have cash in hand to help finance expansion.
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