Economics of reinvestment on rubber in the estate sector

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Date

1997

Journal Title

Journal ISSN

Volume Title

Publisher

Rubber Research Institute. Agalawatta

Abstract

Replanting of rubber is considered as a long term investment.This study investigates the financial viability of reinvestment on rubber with especial reference to estate sector in Sri Lanka.Economic life span of a 33 vear period is considered for the discounted cash flow analysis.The sample consisted of 135 rubber fields randomly selected from 15 large estates. The discounted cash flow analysis revealed a NPV of Rs.65,700 at 15% discount rate.The B/C ratio.Net Nenefit-investment ratio.IRR and pay Back period were 1.35.2.80.22 and 11 years respectively.Certain parameters were varied through sensitivity analysis to assess the economic viability of reinvestment on rubber under different scenarios.

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Keywords

Agriculture, Replanting, Production cost, Latex, Wood

Citation

Journal of the Rubber Research Institute of Sri Lanka79pp.45-61

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