1. Cathy Cattlehand currently has a 100 cow cow-calf operation. She is considering switching to stocker steers. Fill out the partial budget to see if this is a good idea. Cow calf information: 90 surviving calves are born each year; 10 are held as replacements, and 80 are sold at $620 each. Each year 9 cull cows are sold for $980 each. Variable costs of production total $40,000 per year, not counting variable interest. You should calculate interest on the variable costs at 5% for 6 months. Cathy values her cows at $1,200 each. Using an interest rate of 5% on the full value of the cow herd as a fixed cost, the fixed interest she pays is $6,000 per year. (Since she raises her own cows, there is no depreciation.) She insures the cows at $4.00 per head, so her insurance cost is $400 per year. There are no property taxes on the cows. Stocker information: Cathy would buy 200 weaned calves at $600 each and put them on pasture. At the end of six months, she would sell 198 of them for $1,100each. (There is a 1% death loss.) Production expenses (other than purchasing the calves) for this operation would total $100,000, not counting the variable interest. Calculate the variable interest (5%) on all variable costs (initial stocker cost + production costs) for six months. a. Given the information in the partial budget above, would you recommend Cathy switching to stockers? b. At what selling price of the stocker calves, would Cathy change her answer to question a