Learn about Perennial Crop Investment Tool

What is Average Annualized Net Cash Flow?

Annual Net Cash Flow simply describes the revenue received minus the dollars expanded in each period of the life cycle of the tree. This tool places value on your equity and your labor (how much you pay yourself to manage the orchard).

How long should I expect to hold a block (or orchard) in order to maximize the average profitability per year?

For instance, if I were to replace a block early in the life cycle, say at age 8 in this example, there would be a substantial negative average annual profitability, because of a short period of positive of NCF coming in offset by a long period of net cash outflows. As the block is in peak production years, the average annual earnings for holding a block for a particular length of time continued increase. Ultimately, however, as the block starts to decline in productivity, the average profit per year also starts to decline.