An Investment Analysis for Large Scale Paddy Field

Abstract

The purpose of this paper is to substantiate the economic efficiency in the investment for enlargement of the paddy field consisting of lots, each of which is more than 50 ares, with farm roads and a water way for irrigation and drain age, through an investment analysis of a case in which production is organized at the community level and lots' use is accumulated.
The labor efficiency, a basic factor in promoting the economic efficiency, of the enlargement investment, is increased in the areas of both mechanical and manual work. The production organization has enhanced production efficiency, with centralized management of work to be carried out on the basis of cooperation.
The investment analysis is made with the combined use of the present value of profit method and internal rate of return method. In this study, the internal rate of return of 17.1% is obtained on the basis of the following assumptions: (1) the amount of investment consists of the amount borne by beneficiaries, (2) annual profit is constant and (3) the useful life of fixed assets is 30 years.
The economic efficiency of the investment can be judged from comparing the internal rate of return with an average interest rate on the funds raised.