불확실성을 고려한 농업투자사업의 경제성 분석

An Analysis of Economic Feasibility for Agricultural Investments Considering Uncertain Factors : Using Monte Carlo Simulation Technique

Net Present Value (NPV), Benefit/Cost ratio (B/C), and Internal Rate of Return (IRR) are widely used indices to evaluate economic performance for various projects as well as agriculture-related projects. These indices, however, generally assumes deterministic assumptions in applying its components or inputs including possible benefits, costs, and discounting rate. Because deterministic models for economic indices hardly reflect various uncertainties regarding its inputs, probabilistic models could be superior alternatives considering future uncertainties or risk, while providing powerful informations for decision-making. In this study, Monte Carlo simulation, which is one of the probabilistic experiments, are introduced to overcome weak points of the traditionally-used deterministic models. The simulation approach is adapted to analyze economic indices including NPV and B/C using the actual cash-flow data and several probabilistic assumptions for Daeho agricultural investment project. The results shows that simulation approach could provide more flexible and definite decision-making information than those of the traditional deterministic approach. Compared to the deterministic models, simulation approach could also have advantages in interpreting results in terms of reducing possibility of biases.