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Instructions for Using the Standard
Calculator
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User Entry
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Step 1 - Enter the
amount of your investment in the highlighted cell.
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Step 2 - Enter the discount rate you wish to use.
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5%
- Low Risk Enterpise 10% - Moderate
Risk 15% - High Risk
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At
a minimum you should use the interest rate from a loan, or savings rate.
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Add
to the interest rate a factor depending on how risky you percieve the
investment.
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Step 3 - Enter your annual costs for the project.
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Step 5 - Enter the expected annual returns for the
project.
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Results
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5, 10 and 15 year Net Present Value (NPV) is
calculated.
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NPV
- is used to calculate the value of the improvement project while accounting
for risk and opportunities of
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investing
capital in other ventures.
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A break-even year for the investiment is calculated. This calcualtion also accounts for the NPV.
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Detailed Results
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Total Cost - Investment cost plus annual cost
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Revenue - AUM price multiplied by the number of additional
AUMs as a result of the improvement project
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Net Return - The difference between Revenue and Total
Cost.
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Discount Factor - This value is calculated based on the
discount rate entered in the input section.
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NPV - The annual value of the net return after discounting
for risk and opportunity costs.
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Cummulative NPV - Total value of the net return after
discounting for risk and opportunity costs.
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Instructions for Using Econo Range
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User Entry
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Step 1 - Enter the
amount of your per acre investment in the highlighted cell.
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Resource
- University of Wyoming Custom Rates
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Step 2 - Enter the discount rate you wish to use.
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5%
- Low Risk Enterpise 10% - Moderate
Risk 15% - High Risk
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At
a minimum you should use the interest rate from a loan, or savings rate.
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Add
to the interest rate a factor depending on how risky you percieve the
investment.
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Step 3 - Enter the amount it would cost to lease an AUM.
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Step 4 - Enter your annual costs for the improvement
project.
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Step 5 - Enter the expected annual AUM improvement as a
result of the project.
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Resource
- Chapter 5 of the Nation Range and Pasture Handbook (Developed by the NRCS)
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Results
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5, 10 and 15 year Net Present Value (NPV) is
calculated.
|
|
|
| |
NPV
- is used to calculate the value of the improvement project while accounting
for risk and opportunities of
|
| |
investing
capital in other ventures.
|
|
|
|
A break-even year for the investiment is calculated. This calcualtion also accounts for the NPV.
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| |
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|
Detailed Results
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Total Cost - Investment cost plus annual cost
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Revenue - AUM price multiplied by the number of additional
AUMs as a result of the improvement project
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Net Return - The difference between Revenue and Total
Cost.
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Discount Factor - This value is calculated based on the
discount rate entered in the input section.
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NPV - The annual value of the net return after discounting
for risk and opportunity costs.
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Cummulative NPV - Total value of the net return after
discounting for risk and opportunity costs.
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