Fixed costs, which are independent of the production volume, reflect the use of fixed production assets.For example, fixed costs are land rent, interest related to the acquisition of agricultural land, various mortgage, and insurance premiums.However, various types of amortizations in agriculture production (buildings, machinery) are defined also like fixed costs which relate to noncash payments in agriculture .
Incoming and outgoing cash flows can also be described as benefit and cost cash flows, respectively . NPV encompasses the concept of the time value of money taking into account the present and future value of money such as in times of inflation .
Net present value (NPV) is determined by calculating the costs for each period of an investment, and after the cash flow is calculated, the present value (PV) of each period is achieved by discounting its future value at a periodic rate of return .
All potential costs and revenues must be identified.
As we look at all costs and revenues, we have to decide which investment projects will be selected and which will be denied .
Our own considerations and head calculations for projects were not enough and not correct.
Economic parameters were used for the assessment of investments.Costs are an integral part of each production process, and they appear as a result of different activities in the production chain .We distinguish between fixed and variable costs, due to the fact that there are some costs that change during longer time period.That is a comparative analysis of the total cost and total revenue of the agricultural project.of land in the Barbat village at the south end of the island of Rab, a unique organic farm Natura Rab is developed.It was examined by net present value (NPV) and internal rate of return (IRR).Planned annual cash flow and calculations for products were also developed with all additional costs in order to rate the investment more precisely, which gave us a realistic picture of the exact return of each investment.The most important are the net present value (NPV) and the internal rate of return (IRR).In financial terms, the net present value (NPV) is defined as the sum of the present values (PVs) of incoming and outgoing cash flows over a period of time.This group of costs represents a wide range of various agricultural inputs and costs related to their use (pesticides, fertilizers, seeds, animal feed) .The total cost of production as the sum of all production costs Investment costs are present in all three business projects.