Cash Flow Analysis: A Cash Flow Analysis Of Apples

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A cash flow analysis for establishing a high density apple orchard is contained in Table 5. while one for a standard density apple orchard is contained in Table 6. A cash flow analysis shows the cash costs required to establish the orchard (Mowen, Hansen & Heitger, 2014). Cash costs include labor, trees, the irrigation system, chemicals, bee hives, equipment repairs and property taxes. The cost of the land is not included, since the orchard is paid off from income from another established farm. The income, variable costs, and fixed costs are shown for each of the 10 establishment years. It is assumes production in high density orchards begin in year three with 15 bins of HoneyCrisp Apples and increases to 50 bins at full production. The full production and yearly amounts are low averages, things like frost and poor growing season can easily destroy crop for a year wiping out all income. Total variable costs for the high density planting system is $12,263 in the first year, with an additional $15,495 fixed cost for a total cost of $27,758 per acre. This figure does decrease in the
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This can be seen graphically in Graph 1. At full production, or at year 8, the high density apple orchard planting system has a sufficient enough return to pay all previous years costs. A positive cash flow for the standard density orchard begins in year 8, with gross income exceeding total cash crops by $3,166 per acre.This can be seen in Graph 2. At full production, or at year 10, the standard density apple orchard planting system does not have sufficient enough return to pay all previous years costs, it is not until year 11 that all previous production casts can be paid. Again all this can easily change, the price of apples fluctuates yearly, dependent of the supply from growers, the price of $1.00 per pound was an average from the past

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