Determination of appropriate time for farm tractors replacement based on economic analysis

A B ST R A C T Nowadays, tractor is one of the most important power sources in agriculture. Replacement of tractor is one of the most important decisions that should be made by farmer. Proper performance in this case can lead to timely, high quality farm operations which in turns results in considerable decrease in product expenditures and also more income. The current study was performed in order to determine economically optimum life of MF285 tractors in Debal Khazaei Agro-Industry Co. in Khuzestan province of Iran. Moreover, listed price of tractor, annual depreciation and Internal Rate of Return in the study period were calculated. Then, these items accompanied by their repair and maintenance cost were used to determine their economic life. Finally, replacement time for the study tractors was obtained equal as 6981 hours. These hours of operation are performed in about 14 years and thus the tractor should be replaced.