FINANCIAL ANALYSIS OF 25 YEAR ROTATION TEAK PLANTATION : A CASE STUDY AT MAE LI PLANTATION, CHANGWAT LAMPHUN

Abstract

The objectives of the study were to investigate financial return of 25 year rotation of teak plantation at Mae Li Plantation, Changwat Lamphun and to compare the return of the teak plantation between normal and beehole borer damage cases of 3 products types or 6 cases namely: 1) defect saw log 2) sound saw log 3) defect square 4) sound square 5) defect lumber and 6) sound lumber. Financial analysis methods used for the study were net present value, benefit-cost ratio, with the given discount rates of 6, 12 and 18% and internal rate of return. In addition, the sensitivity analysis of the project was also carried out under 3 condition into 3 cases 1) cost was increasing 15% while benefits remained constant 2) cost remained constant and benefit was decreasing 15% and 3) cost was increasing 15% and benefit was decreasing 15%, simultaneously. The results of the study revealed that the NPV values of the sound wood were higher than those of the defect wood. The values were sequently ranked from low to high according to the six selling cases. The IRR of such cases were 12.19, 12.54, 16.88, 17.48, 23,71 and 25.21%, respectively. Tor the lowest discount rate of 6%, the NPV of the first case was decreasing 7.55% compared to the second case: the NPV of the third case was decreasing 12.27% compared to the fourth case, and the NPV of the fifth case was decreasing 23.48% compared to the sixth case. The results of the sensitivity analysis of the project indicated that the third case was the most risky scenario and the nexts were the second and the first respectively, the higher discount rate will cause the project to face more risk.