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Reg. No.: J4-00433-2008 Student of MBA in Agri-Business
Reg. No.: J4-00433-2008 Student of MBA in Agri-Business
Reg. No.: J4-00433-2008 Student of MBA in Agri-Business
ON
SUBMITTED BY:
Mr. Makwana Amitkumar Vitthalbhai
Reg. No.: J4-00433-2008
Student of MBA in Agri-Business
SUBMITTED TO:
Principal,
Post Graduate Institute of Agri-Business Management.
n
NPV = ∑[ F j /(1 + i ) j ] − I 0
j =1
Where,
• Fj is the annual cash flow of the investment after harvesting of crop
• i is the interest rate
• I0 is the initial investment of crop production
• n is the life time of the investment for crop production
12.3.3 Internal Rate of Return (IRR)
Internal Rate of Return (IRR) is a rate of return used to measure and compare the
profitability of investment the project. It is the annualized effective compounded return
rate that can be earned on the invested capital. IRR of an investment is the interest rate
where the costs of the investment lead to the benefits of the investment (Panday, 2009).
Where,
• Lower rate is lower interest rate
• Higher rate is higher interest rate
• NPV at lower rate is Nat Present Value at low interest rate
• NPV at higher rate is Nat Present Value at low interest rate
12.3.4 Benefit Cost Ratio (BCR)
Benefit Cost Ratio (BCR) is also known as Profitability Index (PI) method, it is
the ratio of investment to payoff of a proposed yield. If value of profitability index lower
than one would indicate that the crop yield's present value is less than the initial
investment. The value of the profitability index increases than one, so does the financial
attractiveness of the proposed for selection or feasible to cultivate that crop (Panday,
2009).
Where,
• PV is Present Value of future cash flow
The data collected from the company project report may be risky because it may
not be suitable reliable adequate.
There are regional variations on the growth and development of plant species.
Delphine, S.; Tyner, W. E. and Florence, J. (2009). “Economic Analysis of the Potential
of Cellulosic Biomass Available in France from Agricultural Residue and Energy
Crops”. Bio Energy Research Journal, Springer New York, pp : 4-4.
Professor,
In charge of P.G. Centre.
Approved
Principal,
Post Graduate Institute of Agri-Business Management,
Junagadh Agricultural University,
Junagadh.