It analyzes the historic records of the commercial production of the entire industry in the agroecological zone where the lot of interest is found and simulates the results that could be obtained in terms of tonnes of cane per hectare (TCH) and commercial yield in sugar (%) in both the next cut of the current cycle as well as in the first five cuts of the new cycle of renovation. To estimate the productivity variables, the model offers the options of normal, triangular and uniform distribution.
For the economic analyses, in which the previously selected condition of distribution is maintained, the user should record the percent increases or decreases that could presumably occur in the TCH and yield values in the cut following the current cycle. In addition, the user should record the costs of adaptation, preparation, planting and establishment of the new crop, as well as the type of contract for buying and selling the cane, the minimum rate of return, the expected price for the sugar, the length of delay in the renovation, and the expected inflation.
The economic report refers to the amount of additional net earnings (current value) that the renovation project would generate in comparison with the unrenovated project. There are four financial indicators: (a) Number of cuts required to recover the investment in adaptation, preparation and planting and to recover the money that would not be received by not continuing with the crop under the current conditions and to deliver, during the renovation cycle, a profitability equal to the minimum required by the investor (minimum rate of return considered); (b) cumulative net present value per cut; (c) current net marginal value per cut; (d) probability value (%) that the expected net earnings in each cut would be greater upon renovation than not doing it. |
