‘Maximum return, minimum risk’ is best investment policy

Investment appraisal, cost- benefit analysis, and calculating your return on investment, or ROI, are financial terms that show you whether or not to make an investment, and then how to rank the investments that will give the greatest yield.

As farmers, we all have investment choices. With tightening margins, those investment choices become more difficult, due to tighter cash flow. So, consider your budget, the return on your investment, and how long the investment will deliver returns.

In the financial world, investors maximise return while minimising risk. Us farmers should do business in the same way. A simple example: should I invest in new machinery or should I invest in soil fertility?