Farm Management;

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CHAPTER XIV FINANCIAL FORECAST OF PROPOSED FARM PLANS A financial forecast, or "paper farm" as it is sometimes popularly called, is a try-out on paper of a proposed plan involving substantial money investments and transactions — a methodical predetermination, so far as possible, of the possibilities and probabilities of a given proposition.
Objects of Financial Forecast. — To test a farm by paper methods usually gives exceedingly useful insights as to its financial feasibility, capital requirem
...ents, returns, limitations; into the decisions which must be faced; into a recognition of the amount and kinds of details that are likely to be met. And it provides a means of testing plans when one is established in a farm business, just as well as for testing proposed plans after a given industry has been chosen and a farm selected.
Limitation of Financial Forecasts. — Novices figuring from available tables conclude about as follows: "The profit per hen is stated to be $1 per year. With 5,000 hens, I am assured of a $5,000 income," or, "beans yield 1,000 lb.


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