FINANCIAL ANALYSIS OF INVESTMENTS IN FOREST CONCESSION FOR AMAZON BRAZILIAN BY DETERMINISTIC AND STOCHASTIC METHODS

Cerne

Endereço:
Departamento de Ciências Florestais, Universidade Federal de Lavras, Caixa Postal 3037
Lavras / MG
0
Site: http://www.dcf.ufla.br/cerne
Telefone: (35) 3829-1706
ISSN: 1047760
Editor Chefe: Gilvano Ebling Brondani
Início Publicação: 31/05/1994
Periodicidade: Trimestral

FINANCIAL ANALYSIS OF INVESTMENTS IN FOREST CONCESSION FOR AMAZON BRAZILIAN BY DETERMINISTIC AND STOCHASTIC METHODS

Ano: 2019 | Volume: 25 | Número: 4
Autores: Maisa Isabela Rodrigues, Álvaro Nogueira de Souza, Maisa Santos Joaquim, Keila Lima Sanches, Juliana Baldan Costa Neves Araújo, Fernando Castanheira Neto, Luiz Moreira Coelho Junior
Autor Correspondente: Maisa Isabela Rodrigues | [email protected]

Palavras-chave: Risk analysis, Financial viability, Sustainable forest management

Resumos Cadastrados

Resumo Inglês:

Forest concessions were implemented in Brazil as a way to increase the areas of sustainable forest management. Little is known about the financial viability of forest management in Brazil, which is one of its main bottlenecks. In this context, the aim of the study was to evaluate the financial viability of an investment in forest concession. In order to do so, the Net Present Value (NPV), Periodic Equivalent Benefit (PEB), Internal Rate of Return (IRR) and Real Options Analysis (ROA) were adopted, and the option of abandonment was also analyzed. As a variable for ROA analysis, the productivity (m³.ha-1) at the first years of forest concession under study was adopted. The NPV of the investment corresponds to US$ 8.04.m- ³, the PEB was US$ 0.52.m- ³.year-1 and the IRR, 20.75%. In order to be considered feasible, the forest concession must have a minimum productivity of 17.75 m³.ha-1. Of the 861 managerial decisions, the option to proceed with the investment was adopted in 237 nodes (27.53%), and the decision to abandon was exercised in 624 nodes (72.47%). This is a worrying result for the concessionaire companies and also for the management entities of the forest concessions, mainly when comparing with the concessions reality, where abandonment is an option that has been performed. It can be concluded that the high probability of abandoning highlights a fragility of forest concessions. ROA proved to be a good methodology to complement traditional methods of financial analysis, presenting satisfactory results in aiding decision-making.