Allied & ICAR Exam Bank • ALLIED_0238 MCQ • 1 Mark

Section 2: Farm Machinery

Farm Machinery

Subtopic: Cost analysis of implements and tractors

Question Statement:

In agricultural equipment operations, the 'economic break-even point' (in hours or hectares) is reached when:

Options:

  • (A) Total annual cost of owning and operating the machine equals the cost of hiring custom hiring services
  • (B) Operating costs drop to zero
  • (C) Fuel consumption reaches maximum
  • (D) Depreciation equals salvage value

Answer Key:

A

Step-by-Step Solution & Explanation

Break-even analysis determines minimum annual usage beyond which ownership becomes cheaper than custom hiring.
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