Economic feasibility of constructing a storage unit on rural property in Lagoa Vermelha (RS)

Marlon Vidal Paz and Thiago Ricielli de Paula Aragão

Revista IPecege, 2016, vol. 2, issue 1

Abstract: Brazil's consecutive record agricultural production has not been accompanied by development in the storage infrastructure for this production, thus compromising the results of the activity. Therefore, this study aims to evaluate the economic viability of installing a grain storage unit directly on a rural property located in the municipality of Lagoa Vermelha (RS). The analysis used the indicators Net Present Value (NPV), Internal Rate of Return (IRR), and Discounted Payback, and also included a sensitivity analysis. Based on the results, the project proved to be economically viable, with an NPV of R$ 526,230.23, an IRR of 20.86%, higher than the discount rate of 4%, and with recovery of the initial investment in the fifth year. The investment is sensitive to fluctuations in revenue variables.

Keywords: Financial; Economics (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:ags:ipeceg:386227

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