Investing risk assessment in a livestock weighing service
DOI:
https://doi.org/10.63728/riisds.v8i2.131Keywords:
Economic profitability, financial costs, Monter Carlo simulationAbstract
The weighing of cattle is one of the key activities for the purchase and sale of animals, however, farmers do not have their own scale and resort to static weighing services located in places far from their farms, during the transfer depreciation occurs excretory (excrement and urine) which generates weight loss. This article evaluates the risk of investing in a cattle weighing service using Monte Carlo simulation based on the definition of three scenarios (pessimistic, conservative and optimistic), in which changes in demand and the margin of inflation were considered. a period of five years. The economic model was built based on the administration of expenses and profits, applying normal distributions for the management of monthly and bimonthly costs, a triangular distribution was extracted for the analysis of the demand in the three proposed scenarios. In verifying the return on investment, the concepts VAN (Net Present Value) and the IRR (Internal Rate of Return) will be applied. The simulation gave as a result that in the pessimistic scenario they pose a viability percentage of 35%, in the conservative 88% and in the optimistic 95%; It is concluded that the service is feasible in any situation that may occur when it is introduced in the market, exceeding the minimum 20% return on investment.
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