Evaluation of Investment Opportunities: Tools for Decisionmaking in Farming and Other Businesses

Arthur J. Walrath

No 320648, Miscellaneous Publications from United States Department of Agriculture, Economic Research Service

Abstract: Report Introduction: A manager constantly faces choices among ways to use his capital. Should he invest his limited capital in enlarging his inventory or invest it in more land improvements? Here, he can visualize the possibility of greater percentage returns in the shortrun if he uses his capital for more stock. Or, should he incur the costs of planting trees and fencing an area? Here, he realizes there will be no return for 10 or 20 or more years. The return could even go to others. Or, should he buy additional fertilizer? Here, he can usually visualize increased production the first year and possibly some increase over the next several crop years. Or, he might face the question of when he should sell: today at a given price or 10 years hence for some unknown price? In such problems as well as many others, present values and estimated future values are involved. This handbook presents this complex subject of analysis of present and future values in such a manner as to make it useful for normal business operations. Relatively simple problems are discussed in this report. A thorough understanding of the formulas used to solve these problems is important since they also apply to some of the more complex problems with which business managers might be concerned.

Keywords: Financial Economics; Research Methods/Statistical Methods (search for similar items in EconPapers)
Pages: 105
Date: 1977-06
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Persistent link: https://EconPapers.repec.org/RePEc:ags:uersmp:320648

DOI: 10.22004/ag.econ.320648

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