MEETING THE CHALLENGE OF ESTABLISHING COMMERCIAL MOHAIR ENTERPRISES BY BUILDING AN INTERACTIVE ENTERPRISE MANAGEMENT AND FINANCIAL MODEL

Abstract

To assist in attracting investors into mohair production in Australia, a production and financial model was built as a learning and support tool. The work aimed to reduce search time and thinking costs about the impact of management strategies on financial feasibility. Various management strategies and assumptions applied to a case study with 300 breeding Angora does and eight variations. The results showed an internal rate of return for mohair ranging from 9.3% to 21.2% over 12 years, a median gross margin per effective hectare ranging from $82 to $167, cash at bank in year 12 ranging from $8,700 to $56,800 and net enterprise assets ranging from $69,900 to $155,700. A key benefit of the model was its ability to allow new farmers to explore potential management strategies and their assumptions about a future enterprise before investing.

Keywords

• Investment
• Financial return
• Modelling
• Gross margin
• Net present value
• Decision-making
• Management