Analysis of commercial profitability of poplar plantations aged 29 years applying some methods of investment calculation
DOI:
https://doi.org/10.54652/rsf.2009.v39.i1.169Keywords:
commercial profitability, poplar, costs, receiptsAbstract
UDK 630*23:582.681.81
582.681.81:630*6
Poplar growing has been expanded during the last decades, because poplar wood has a series of advantages compared to other tree species, which first of all have a very long rotation. Based on the method of analysis of commercial cost- effectiveness, this study resulted in the conclusions which could be used in future, especially in practice.
The study was based on the data of receipts and expenses in the Management Unit ,,Rađenovići Novi", compartment 20a (FE ,,Sremska Mitrovica"). By the above methods, it was concluded that the project middle-rotation poplar growing in this case is altogether unacceptable. Namely, under the discount rate of 12% and for the time period of 29 years, the project is unprofitable, the loss is even € 1,900. Unprofitability of the project is confirmed by "cost-benefit" analysis, because the project expenses under the discount rate of 12%, are about 3 times higher than the receipts. Internal rate of return is 5.41%, meaning that only 5.41% of the total capital will be returned, i.e. in 29 years. The possible recommended solution can be the lowering of the interest rate to the amount equal to or lower than 5.41%. By the application of the susceptibility analysis, it was concluded that there was an option to realize the positive financial effect by decreasing the costs or by increasing the receipts. .
In practice it is necessary to improve the position of producers in getting the deficient financial means for the investment in poplar cultivation, so as to stimulate the establishment of artificial poplar plantations, especially in the private sector (on private land which are unattractive for agriculture production).
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