AgProfit™: a net present value and cash flow based decision aid for agriculture producers

James W. Julian and Clark F. Seavert

Agricultural Finance Review, 2011, vol. 71, issue 3, 366-378

Abstract: Purpose - The purpose of this paper is to present AgProfit™ as a tool for users to assess economic risks associated with adoption of new technologies or production practices in production agriculture. Design/methodology/approach - This paper presents the AgProfit™ software program, its approach to capital investment analysis and demonstrates the program use by developing a scenario for analysis and discusses the process and results of the analysis. Findings - AgProfit™ was developed to assist growers in understanding the risks associated with technology adoption. The example presented in this paper demonstrates the value of the software program as a decision‐making tool on the complex question of how many acres are required for an economically beneficial adoption of a new technology. Thus, with this software program, a grower can base investment decisions on the net present value and internal rates of return on an investment rather than a sales pitch or “gut” feeling. Originality/value - AgProfit™ is a recently developed software program that fills a void in available decision tools, providing users with the ability to assess the profitability and feasibility of production investment decisions.

Keywords: Computer software; Agriculture; Technology adoption; Financial analysis; Risk assessment; Specialty crops; Net present value; Decision support systems (search for similar items in EconPapers)
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:eme:afrpps:v:71:y:2011:i:3:p:366-378

DOI: 10.1108/00021461111177620

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