Investment Feasibility of Black-Boned Chicken of Farmers in Chiang Mai Province

Abstract

          The investment feasibility of black-boned chickens of farmers communities in Chiang Mai Province has two objectives, which are 1) to study the characteristics of farmers raising black-boned chickens and 2) to study cost, return, and investment feasibility of black-boned chickens of farmers communities. Data is collected from 300 farmers, who are in Chai Prakan District, Fang District, and Mae Ai District, by using a questionnaire. The project life is set at five years, as the lifetime of the fixed assets. The discount rate of 6.5 percent is also set.

          The results show that the black-boned chicken farmers are interested in upgrading their products to the required standard by the market. However, they are still lacking the appropriate knowledge about cost accounting. The initial investment cost of raising the black-boned chicken is 264,290 baht and the operating cost of raising the black-boned chicken is 373,560 baht per annum. As for the return part, farmers will have a total income from raising black-boned chicken of 669,219 baht per annum. When taking the cost and return to assess the investment feasibility, it shows that the net present value (NPV) is 964,374.03 baht, the benefit cost ratio (BCR) is 4.65 times, the internal rate of return (IRR) is 109.07%, and the payback period (PB) is 0.89 years. For the sensitivity analysis, this paper reduces and increases the cash flow of 1.60% per annum. The results shows that the investment of raising black-boned chicken is worth in both cases. Therefore, it could be concluded that the investment of raising black-boned chicken in Chiang Mai is a worthwhile investment.