A Capital Budgeting Analysis of Electricity Generation on Egg Farms

Boris Bravo-Ureta and Glen McMahon

Journal of the Northeastern Agricultural Economics Council, 1983, vol. 12, issue 01, 8

Abstract: This paper analyzes the economnic feasibility of an investment designed to digest anaerobically cage layer manure and convert biogas into electricity which is sold to a public utility. A simulation model is used to calculate the aftertax net present value (NPV) of a digestion system for eight egg farms differing in size under alternative scenarios. The results sh& that farm size and electricity price projections have a major impact on the magnitude and sign of the NPV estimates. Technical performance also has a marked effect on the investments' feasibility, while tax credits and 1& interest rates have a relatively minor influence.

Keywords: Agricultural Finance; Resource/Energy Economics and Policy (search for similar items in EconPapers)
Date: 1983
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Persistent link: https://EconPapers.repec.org/RePEc:ags:nareaj:159499

DOI: 10.22004/ag.econ.159499

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