PROJ00048

• Contract/PO #: C153372
• Contractor Name: Hyannis Reservoir Company
• Water District: 0
• County: Jackson
• Bill Number: XB 99-999
• Loan Projects - Doc Type: Feasibility Study

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Assuming calves are sold for 80~ per pound when
their weight reaches about 425 pounds ($340/calf), an
additional annual gross revenue of $130,220 per year
would result.

383 calves/yr. x 425 Ibs. x 809/1b. = $130,220

The cost per head of maintaining the additional cow
herd is estimated at $75/year. This gives a total cost
of $31,950 per year and a resulting net benefit of
$98,270 per year.

$130,220 - '$31,950 =

$98,270

This stream of benefits at a 10% discount rate over
a 50-year period yields a present worth value of $974,327.

$98,270/year x 9.9148 = $974,327

This measure of benefits when used to analyze the
large project alternative yields a benefit/cost ratio
of 1.1.

$974,327 / $850,000 = 1.1

E. Probable Project Benefits

Realistically, this project will be operated to benefit by a
combination of the above types of agricultural production.
Astle market forces work, they will dictate which of the
three types of benefits will be realized each season. It
seems most appropriate to depend on only a portion of the
hay production to increase calf crop sales. Additional
revenue would be accrued through the direct sale of the
remaining hay which is available each year. This approach
also lends itself to provide a margin of safety in the
event that the cost of the reservoir exceeds the estimate
presented in this report following soils investigations and
actual construction.

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If, for instance, 75% of the expected hay production
were to be used to increase the Meyring Livestock operation,

426 cow units x 75% = 320 cow units

The, annual calf crop revenue would be:

,j

$98,270/year x 75% = $73,703

Applying the 10% discount rate to this annual stream
of benefits would result in a present value of $731,000.

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