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Machinery Costs And Inflation

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  • Watts, Myles J.
  • Helmers, Glenn A.

Abstract

This article addresses (1) the differences in machinery cost estimating techniques, particularly for depreciation and opportunity cost, and (2) the necessary modifications in cost estimating techniques to account for the changing monetary base under inflation. The conditions under which capital budgeting and traditional budgeting differ are examined on a before tax and after tax basis, with and without inflation. The variations in cost estimates depending upon techniques, and with and without inflation, are compared.

Suggested Citation

  • Watts, Myles J. & Helmers, Glenn A., 1981. "Machinery Costs And Inflation," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 6(1), pages 1-18, December.
    • Handle: RePEc:ags:wjagec:32573
    DOI: 10.22004/ag.econ.32573
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    File URL: https://ageconsearch.umn.edu/record/32573/files/06020129.pdf
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    References listed on IDEAS

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    1. Anthony H. Chisholm, 1974. "Effects of Tax Depreciation Policy and Investment Incentives on Optimal Equipment Replacement Decisions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 56(4), pages 776-783.
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    Cited by:

    1. Li Lee, Mei, 1986. "Cost Competitiveness of Apple Production in British Columbia Versus Washington State," Working Papers 244004, Agriculture and Agri-Food Canada.
    2. Shaik, Saleem & Atwood, Joseph A. & Helmers, Glenn A., 2012. "Did 1933 new deal legislation contribute to farm real estate values: A regional analysis," Journal of Policy Modeling, Elsevier, vol. 34(6), pages 801-816.

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    Keywords

    Agricultural Finance;

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