The purpose of this paper is to illustrate how to compare the financial returns of alternative land uses. These crops are commonly grown by private landowners in North Florida.
Many factors go into a landowner's investment decision.
This paper only considers financial analysis, namely the stream of financial costs and returns specifically associated with planting, growing and harvesting the crop. Other factors to consider include cash flow needs, the environmental and economic impacts on wildlife, water quality, soil conservation, aesthetics and other attributes important to the owner. The first step in financial analysis is to determine what decision criteria to use. A dollar earned today is not the same as a dollar earned in twenty years. The NPV technique uses a discounting procedure for finding the present value of future sums.