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Twilight Acre Farms

Mary Gillett; Stephen Rene Frey

Product #:9B06B001
Supplier:Ivey
Discipline:Accounting
Setting:Canada, 2004
Details:Case (PDF) • 3 pages • 2006-01-13 (Rev: 2009-09-14)

Subjects:

Capital budgetingBudgets and budgetingFinance and investingAccounting

Industries:

Agriculture sector

Geography:

CanadaNorth America
Your Price:$4.62

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At the end of the harvest season, the owner of a family-owned farm had to decide whether to purchase a new combine or perform significant repairs on the existing machine. He realized that the decision needed to be made before the next harvest season, but was unsure of which option would best fit the company. This case outlines a simple capital budgeting decision in the farming industry. It can be used to educate individuals on the farming industry with concepts required to make an investment decision.

Learning Objectives

This case is intended to be used in the capital budgeting section of an introductory accounting or finance course. Quantitatively, the case provides an opportunity to perform a trade-off analysis on a future investment. It allows students to perform net present value calculations and determine the profitability of this particular investment. The case provides an excellent platform for looking at the qualitative side of decision making. Students must understand both the short- and long-term goals of Twilight Acre Farms. Also, students must weigh the pros and cons of each alternative to determine the appropriate choice.
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Case Study: Twilight Acre Farms (English version) | Ivey Publishing