Economic analysis on Rubber Development Component of Pahang Barat Integrated Agricultral Development Project in the district of Temerloh, Pahang, Malaysia
1990
Bakar, Abdul Majid Bin
Project is not really financially profitable and feasible, as shown by the Internal Rate of Return of 9.66 percent, which is lower than the discount rate of 11 percent. The B/C ratio investment will generate a return of 0.95 ringgit for every one ringgit invested. The net present value of M$ -1,203,403, is a negative income generated from this rubber project investment. Results of the economic analysis show investment in the rubber project to be economically worthwhile. Using the same discount rate of 11 percent, the Economic Rate of Return is 17.19 percent; the net present value, M$ 9.121,847 and the B/C ratio, 1.49. Land ownership of each participant would increase by 2.43 hectares. They will receive by joining the project and on top of that they do not have to surrender what land they own outside the project. Since the plots are all of equal size, i.e., 2.4 hectares, every participant will receive equal income, resulting in better income distribution among the 830 participants which is around M$ 5,636 higher by M$ 1,676 than the income received by people outside the project. Financial analysis, cost of inputs should decrease by 10 percent, if the project is to be feasible. In economic analysis, price of outputs can decrease, or cost of inputs can increase by more than 15 percent.
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