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16. Consider a farmer who plans to sell a group of hogs this week but wonders if feeding them for another week before selling them

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16. Consider a farmer who plans to sell a group of hogs this week but wonders if feeding them for another week before selling them would be more profitable. (10 points) During this 7 days, the hogs are expected to gain 10 lb. from 260 to 270 lb. Hog price is $0.40/ lb. and is expected to be constant. Feed costs $20.00 per one hundred pounds of gain. Labor and other costs are $0.40 per hog per week. The opportunity cost (lost interest) of not selling the hog this week is 20% on an annual basis. Analyze this problem (keeping the hogs an additional week) in a partial budget format. Note: it will be easiest to do these calculation in a S/hog basis. Positive Effects: 1. Additional receipts 2. Reduced expenses Total Positive Effect Negative Effects: 1. Reduced receipts 2. Additional expenses Total Negative Effects NET EFFECT= Positive Effects - Negative Effects = 17. Should you feed the hogs for an additional week? Yes or No

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