1. Think Break #1: Answer 1) What will be the new or added revenues?
1% x 180 bu/ac x $3/bu x 1,000 ac = $5,400
2) What costs will be reduced or eliminated?
$25/ac x 1,000 ac = $25,000
3) What will be the new or added costs?
$22/ac x 1,000 ac = $22,000
4) What revenues will be reduced or lost?
None
5) What’s the net benefit?
$5,400 + $25,000 – $22,000 = $8,400

2. Partial Budget: Think Break #1: Combine Purchase vs Custom Hire
Benefits
Costs
Additional Revenues
0.01 x 180 bu/ac x $3/bu x 1,000 ac = $5,400
Additional Costs
$22/ac x 1,000 ac = $22,000
Costs Reduced
$25/ac 1,000 ac = $25,000
Revenues Reduced
None
Total Benefits
$25,400
Total Costs
$22,000
Total Benefits – Total Costs = Net Gain
$8,400