The possibility of the bussines risik [i.e. risk] evaluation of the agrucultural [i.e. agricultural] enterprise
2008
Sredojevic, Z., Poljoprivredni fakultet, Beograd - Zemun (Serbia) | Milic, D., Poljoprivredni fakultet, Novi Sad (Serbia)
Uncertainty of accomplishing the business results as a profit on totally invested funds, i.e. capital, presents a business risk. The risk results from the fact that the investment of capital, regardless of whether it is spent or no and by which intensity it is spent, is itself a certain cost. This is a fixed charge occurring even if invested funds are not active. For instance, depreciation of capital has to exist regardless of capital assets usage and because the utility value of the capital assists are time limited. Also, keeping and insurance of the invested funds require organising of certain functions and management of the company, whereby certain costs, not related to the company operation, occur. Hence, costs of depreciation of capital and the company organisation present fixed charges that have to be covered in order to avoid business loss, which can be achieved depending on profitability and profit gained relating to invested capital.
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