OPTIMIZATION OF INVESTMENT STRATEGY FOR THE ACQUISITION OF MEANS OF MECHANIZATION

Authors

  • Jozef Repiský Slovak University of Agriculture in Nitra

DOI:

https://doi.org/10.15544/RD.2021.071

Keywords:

multi-periodic optimization model, investment project, acquisition of means of mechanization, net present value

Abstract

The aim of the paper is to identify the optimal investment strategy of acquiring the means of mechanization of an agricultural enterprise. A suitable mean to meet the goal is the application of a multiperiodic optimization model, which is designed in the spreadsheet program Excel (including Solver). Objective function is represented by property maximization at the end of considered period via Net present value. The set of restrictive conditions is represented by the balance of production and financial factors, the balance of cost and production indicators, production and credit restrictions, as well as the conditions of securing the company's liquidity in each time period through positive cumulative cash flow and sufficient financial resources to cover capital investment and working capital. The comparison of NPV values ​​of individual variants of optimization models documents the logical consequences of the gradual optimization of plant and animal production, the time of acquisition of mechanization means without and with the limitation of credit resources and the time of loan repayment. The most suitable solution, with additional restrictive conditions for limited credit resources of up to € 50,000 per year, an interest rate of 6% and a repayment period of up to 7 years, is to procure a Vogel-nootHektor plow in the first year, Horch Pronto seed drills in the second, fertilizer spreaders Rauch in the third, a Fendt combine with a rape cutter and a pea straw crusher in the fourth year and a corn header in the fifth year. The resulting value of NPV represents the amount of € 343,922, while the required amount of credit resources in the first year is € 42,595 with a repayment period of 4 years, in the second year € 31,079 with a repayment of 3 years and in the fourth year € 48,284 with a repayment period of 7 years.

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Published

2022-01-25

Issue

Section

Social Innovations for Rural Development