6. With the neighbors getting closer and less farm oriented and your interest in expanding your dairy operation in the near future, you have to do a better job of manure handling You are looking at Tractor X. This way you can get the manure in the ground with less loss and less irritation to the neighbors. That rig lists for $565.000. The dealer will allow $56,600 for your old tractor that would sell at auction for $42.000, You plan to keep the machine seven years, at which point it will be worth $70,000, You can borrow the money for 5.0% annual interest, and expect 2.6% inflation. Tractor X willl take up 775 square feet of storage space. Assume 4,530 hours of use. Use 1% of list price for a tax estimate. (15 points) How much will the average annual ownership cost be on this machine? Hint: Start with Depreciation and Interest; use capital recovery method DI= Value Lost Amortization Factor + Ending Value Real Interest Rate [Amortization Factor Where BV-Beginning or Starting Valan, SV-Salvage Valoe or Ending Valae (Aman x (BV Sv) + [r x sV] Or Capital Recovery = 141 6. With the neighbors getting closer and less farm oriented and your interest in expanding your dairy operation in the near future, you have to do a better job of manure handling You are looking at Tractor X. This way you can get the manure in the ground with less loss and less irritation to the neighbors. That rig lists for $565.000. The dealer will allow $56,600 for your old tractor that would sell at auction for $42.000, You plan to keep the machine seven years, at which point it will be worth $70,000, You can borrow the money for 5.0% annual interest, and expect 2.6% inflation. Tractor X willl take up 775 square feet of storage space. Assume 4,530 hours of use. Use 1% of list price for a tax estimate. (15 points) How much will the average annual ownership cost be on this machine? Hint: Start with Depreciation and Interest; use capital recovery method DI= Value Lost Amortization Factor + Ending Value Real Interest Rate [Amortization Factor Where BV-Beginning or Starting Valan, SV-Salvage Valoe or Ending Valae (Aman x (BV Sv) + [r x sV] Or Capital Recovery = 141