A Discounted Cash Flow Analysis of Financial Returns from Biomass Crops in Ireland
Fiona Thorne and
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James Breen: Rural Economy and Development Programme, Teagasc, Athenry, Co. Galway, Ireland
A.m Butler: School of Agriculture, Food Science and Veterinary Medicine, University College Dublin
Fiona Thorne: Rural Economy and Development Programme, Teagasc, Athenry, Co. Galway, Ireland
M. Wallace: School of Agriculture, Food Science and Veterinary Medicine, University College Dublin
No 808, Working Papers from Rural Economy and Development Programme,Teagasc
The economic case for the production of biomass crops can only be established through a comprehensive analysis of the potential costs and returns of these crops. Using data from Ireland, this paper provides a Discounted Cash Flow (DCF) investment analysis for two of the most common biomass crops, willow and miscanthus. We find that miscanthus consistently generates investment returns greater than willow. Sensitivity analysis is used to examine the effects on the estimates of variation in key physical and financial parameters. The superseded enterprise, establishment grant level, yield level, price level, and length of production lifespan are shown to significantly influence the returns generated by investments in willow and miscanthus.
Keywords: Willow; Miscanthus; Discounted Cash Flow; Sensitivity Analysis (search for similar items in EconPapers)
Pages: 22 pages
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