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How has past weather affected tart cherry profitability?

The profitability of the investment is reported as an annualized net return. That is, in the early years of the investment net cash flows are highly negative. Funds are being invested in site preparation, trees, and tree maintenance. The time between the initial investment and when net cash flows become positive is typically at least eight or nine years for a block of tart cherries. Net cash flows increase as yields increase, with yields often reaching a plateau around 12 years of age and remaining at that level for perhaps a decade, at which time the beacon to drop off. What the annualized net return does is convert this very uneven return into a constant return.

If the annualized net return is positive, it means that the investment is covering all the costs that you have inputted into the model. The default costs include a charge for unpaid family labor, management, and a target rate of return.