A farmer has 240 acres under cultivation at $188.99 per acre. If he averages 60 bushels/acre, what is the expected profit if the price per bushel is $5.67?

Rationale

$36,290.40 is the expected profit for the farmer.

To determine the expected profit, we first calculate the total revenue from the bushels produced and then subtract the total costs of cultivation. The farmer cultivates 240 acres at a yield of 60 bushels per acre, leading to a total revenue that is significantly higher than the cultivation costs.

A ($30,000) YOUR ANSWER

This option underestimates the expected profit. It likely arises from miscalculating either the total revenue or the costs. The calculations for revenue based on bushels produced and pricing at $5.67 per bushel yield a higher figure than this choice suggests.

B ($36,290.40) CORRECT

This value correctly reflects the expected profit when calculating the total revenue from 240 acres yielding 60 bushels each, multiplied by the price per bushel of $5.67, and subtracting the total cost of cultivation ($188.99 per acre).

C ($40,000) YOUR ANSWER

This option overestimates the profit by failing to account accurately for the total costs incurred in cultivation. The profit calculation must factor in both revenue and expenses, and this choice ignores the actual cost of cultivation per acre.

D ($45,000) YOUR ANSWER

This figure also overstates the profit, as it likely assumes a higher revenue without properly subtracting the total cultivation costs. The substantial costs associated with cultivating 240 acres at $188.99 per acre must be accounted for to reach a realistic profit estimate.

Conclusion

The expected profit of $36,290.40 is derived from careful calculations involving both revenue from bushels produced and the costs of cultivation. Accurate financial assessments must always consider both income and expenses to arrive at the true profit, which in this case clearly indicates that options A, C, and D do not reflect the correct figures.

A farmer has 240 acres under cultivation at $188.99 per acre. If he averages 60 bushels/acre, what is the expected profit if the price per bushel is $5.67?

$36,290.40 is the expected profit for the farmer.

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