Course Content
Introduction to agribusiness management- definition, Scope and importance; concept of business management
Basic concept and definitions of firms, plant, industry and their interrelationships with respect to agricultural production
Agribusiness environment, management systems, and managerial decisions
Cooperatives- concept, definitions, role, organization, structure, cooperative law and bylaws, developing agriculture cooperatives, cooperative marketing, cooperative farming
Learn agribusiness management, marketing and cooperatives with Braimy- B.Sc Agriculture
About Lesson

– It ignores time factor

a) Payback period

– The payback period is the length of time required to recover the initial investments.

It is useful in investment at risky sector investments.

Mathematically ,

Pay back period = no of years preceding the final recovery + [Balance still to be recovered/      cash flow during the final year of recovery]

or, Pay back period = Initial investment/ Annual net cash return.

Decision criteria

– Accept any project that has minimum pay back period.


-It is simple to calculate and easy to understand.


-Payback period has very limited economic meaning because it ignores the time value of money and the cash flows after the payback period.

b) Simple rate of return (SRR)

SRR= (Average annual net cash flow after financing / Investment amount) * 100

Decision criteria

i. SRR > RRR; accepted

ii. SRR= RRR; indifferent

iii. SRR< RRR; rejected.

c) Proceeds per unit of outlay

– It is calculated by dividing total net value of incremental production by the total amount of investment.

– So higher the proceeds per unit of outlay, the higher the economic feasibility of the investment or project.

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