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6. Suppose the farmer you work for is considered the purchase of an irrigation system. This irrigation system will irrigate 120 acres. You compile the
6. Suppose the farmer you work for is considered the purchase of an irrigation system. This irrigation system will irrigate 120 acres. You compile the following information to help her decide: Cost of irrigation system: $84,000 Additional crop income from yield increase: $204/acre Additional crop expenses from higher input levels: $62/acre Irrigation expenses: $45/acre You find a loan that will cover the cost of the irrigation system that requires equal payments over the first 3 years. Complete the following Cash Flow Budget so that she can see when to expect positive cash flow. Year 3 1 2 4 5 Cash inflow: Additional crop income Cash outflow: Additional crop expenses Irrigation expenses Loan payments Total cash outflow Net cash flow
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