Positive Cash Flow Research Articles

Terminal Value in SMEs: Testing the Multiple EV/EBITDA Approach

AbstractThis study focuses on answering whether EV/EBITDA multiple of public companies in the food industry can be useful to obtain the Terminal Value (TV) in the valuation of unlisted small and medium-sized food companies. A case study into Spanish unlisted agribusinesses is designed for several samples and accounting years from 2010 to 2013. By means of a discounted cash flow (DCF) model combined with bootstrap techniques, the TV/EBITDA empirical distribution of the unlisted multiples is obtained for two different scenarios of free cash flow (FCF) growth, and then compared with the EV/EBITDA of the listed companies in the same industry. The results show that the stock market EV/EBITDA multiple may be used to determine the TV in the valuation process of unlisted small and medium-sized food companies that consistently obtain positive cash flows.

Cost–benefit analysis of two culture methods that influence pearl production from the black‐lip pearl oyster, Pinctada margaritifera

The black‐lip pearl oyster, Pinctada margaritifera, used for round pearl production in Polynesia, is generally cultured using “ear‐hanging” where they are attached to a rope to form “chaplets.” In other countries, pearl oysters are cultured using panel (pocket) nets that are more expensive than chaplets but afford more protection to cultured oysters. Prior research has shown panel nets produce pearls of higher quality and value, potentially generating higher profits. This study used cost–benefit analysis to compare pearl production using chaplet‐based and panel net‐based culture methods. Whole farm data, including gross revenues and annual production costs, fixed and variable, were analyzed. Average production cost per pearl using panel net‐based culture was USD 22.47 and for chaplet‐based culture was USD 21.55. However, use of panel nets saved around 3,430 hr (USD 6,860) of labor a year, offsetting the greater capital investment. A chaplet‐based pearl farm generated USD 65,738 in annual profits compared to USD 88,774 for a panel net‐based farm. Positive cash flow was achieved 1 year earlier (Year 7) for the panel net‐based farm. This is the first economic analysis of different pearl culture methods for P. margaritifera and evidence of profitability will support further development of the black‐lip pearl industry in the Indo‐Pacific region.

Bank Guarantees of Construction Projects, their Concept in Management Accounting and Role in Regional Development

On a regional scale, the intensity of construction projects is an advantage, acts as a multiplier and increases the economic potential of the region. It is a fact that construction projects are a great financial burden for investors and are associated with significant risks that can influence the regional development. These risks arise from both the project itself and from a large number of stakeholders with. Some measures of risk can be eliminated. One such risk is to ensure the keeping the contractual liabilities. For this reason, various forms of bank guarantees are used, but they increase contractor costs and project price. Regional decision is how much the contract is necessary for the positive development of the region and ensuring positive economic cash flows. Meet deadlines and flexible reactions to the current situation is in the company supported with maintaining financial frameworks at several banking institutions. The price depends on many factors including size of the company and financial situation. Then financial costs related to construction have not only variable character, but are also fixed. Market uncertainty, the changing status of labour supply on the one hand and maintaining financial frameworks, capacity and long-term contractual obligations on the other hand, requires a flexible response with respect to cost control. The aim of the paper is to analyse the current situation, define key factors for the pricing of bank products and their impact on the construction price. Methods of pricing, costing, accounting will be used for suggestion of a suitable model for true display and management of financial costs with regard to the construction specifics. These outputs will serve as a basis for finding questionable areas in this area and will be a subject to further investigation.

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Economic Evaluation of Rainwater Harvesting and Conservation (RWHC) Technologies for Sweet Potato Cultivation in Sierra Leone

A field trial was conducted to evaluate the economic performance of rainwater harvesting and conservation (RWHC) technologies for sweet potato cultivation in Sierra Leone during five intensive cropping seasons (2014 second – 2016 second cropping season) at the on-station research site of the Njala Agricultural Research Centre. The experiment was laid out in a randomized complete block design in three replications following a factorial combination of two levels of mulch (no mulch and mulch) and three levels of RWH structures (open ridge, tied ridge and arch ridge). Six RWHC technologies evaluated: open ridge without mulch (OR-M), open ridge with mulch (OR+M), tied ridge without mulch (TR-M) and tied ridge with mulch (TR+M), arch ridge without mulch (AR-M) and arch ridge with mulch (AR+M). Profitability (gross margin, net income and breakeven), investment (NPV, IRR and BCR) and sensitivity analyses (25% root yield loss and 10% fall in the market price of sweet potato roots) were used to evaluate the economic performance of the RWHC techniques. The TR+M (SLL 2,091,280) had the highest net income followed by the AR-M (SLL 693,640) and AR+M (SLL 2,218,160) RWHC technologies. The traditional OR-M was not profitable (SLL -2,487,760) for sweet potato cultivation. Based on the cost of production, the OR-M, OR+M, and TR-M RWHC technologies require a root yield increase of 50.5%, 3.0% and 35.4% to breakeven. The AR+M had the highest and positive net seasonal cash flow returns throughout the five cropping seasons. The breakeven point on the net season seasonal cash flow returns for the TR+M, AR-M and OR+M RWHC technologies was in the 2015 main cropping season. At discount rates of 10%, 15%, 20% and 25% the highest NPV was obtained from the AR+M followed by the TR+M and AR-M RWHC technologies. The highest IRR was obtained from the AR+M (111%) followed by TR+M (84%) and AR-M (61%). The AR+M, TR+M and AR-M RWHC technologies had benefit-cost ratios greater than 1. Under uncertain conditions of 25% root yield loss and 10% fall in the market price of sweet potato roots, the AR+M and TR+M are the most profitable RWHC technologies that could be invested in. These technologies should, therefore, be promoted for adoption through on-farm trials in order to enhance intensive sweet potato cultivation on upland gravelly soils in Sierra Leone.

Діагностика відповідності платоспроможності базовим концепціям бухгалтерського обліку.

The theoretical and practical aspects of solvency diagnostics in the short and long-term periods of time have been studied in the contours of the basic concepts of international financial reporting standards: the concept of continuous business and the concept of financial capital preservation, taking into account updated requirements for opening bankruptcy proceedings in accordance with the Bankruptcy Code of Ukraine.Analytical tools and analytical procedures for diagnosing solvency on the basis of potential cash flows, positive potential net cash flow, which are reflected in working capital, availability of working capital, financial ratios of mobility and security, coefficient of concentration of equity are proposed.Based on the significance of these indicators in the diagnosis of the timely identification of the inability to fulfill their obligations, it is proposed to unify their calculation, a single terminology in their name in the existing methods of financial analysis approved by the executive authorities.

Cash Flow Statement Analysis between Commercial Banks (With Reference to Himalayan Bank Ltd. and Global IME Bank Ltd.)

Banks are general means of institutions that deal with money. They provide financial resources for the development of the nation. They collect deposits from the people and lend these resources to people who demand investment. This study aims to evaluate and compare cash flows of selected two commercial banks. It helps to find out sources and uses of cash to analyze cash flow performance of Himalayan Bank and Global IME Bank limited. Cash flow statement is a statement which states the cash inflows and outflows of cash. A statement of cash flow reports cash receipts and payments classified according to the major activities: operating, investing and financing during the period. In this paper, a comparative study has been undertaken between two banks Global IME Bank limited and Himalayan Bank Limited. This study has been carried out with analytical research design to analyze the cash flow of two banks. Secondary data were used in this study. The cash flow from operating, investing and financing activities is fluctuating trend. It is also found that operating cash flow is positive and financing cash flow is negative in most of the years. In comparison, the cash flow of HBL has more consistency than GIBL. Both banks have positive Net cash flow except few years. Because of the conflict and political instability, the banking sector has also been affected. In banking industry, it seems that operating expenses are increasing year by year. Therefore, commercial banks should pay good attention to the minimization of operating expenses as possible.

Financial analysis and corporate governance of AA: A case study

This paper evaluates AA’s financial performances by analyzing its financial reports throughout 2010 to 2012 using ratio analysis. Strengths and weaknesses are identified. Quantitative ratio analysis (liquidity measurement, profitability indicators, financial leverage/gearing, operating performance and investment valuation) indicates AA scores satisfactory among the five indicators, implying good corporate governance positively enhances financial performance. Positive cash flows reveal satisfactory liquidity positions. Results provide implications for companies to maintain better corporate governance in future.

Metaheuristic Algorithms for Multimode Multiproject Scheduling With the Objective of Positive Cash Flow Balance

This paper investigates the problem of how to achieve a positive cash flow balance by multimode multiproject scheduling, in which a contractor must implement multiple projects concurrently, and activities can be performed with one of several alternative modes. First, based on formulating cash flows for the projects, we construct an optimization model that can minimize the maximum gap between accumulative cash outflow and cash inflow, thus balancing cash flow positively by arranging optimal execution modes and start times for activities. Then, we prove the NP-hardness of the studied problem and design two metaheuristic algorithms, namely, tabu search (TS) and simulated annealing (SA), which search the desirable solutions in nested and mixed ways, respectively. Finally, taking the multistart iterative improvement (MSII) as comparison algorithm, the performance of the two algorithms developed is evaluated through a computational experiment performed on a data set generated randomly. From the research results, the following conclusions are drawn. The TS and SA are more suitable for solving the smaller and larger problems, respectively, while the nested searching structure could enhance the algorithm’s efficiency. With increases in the advance payment proportion, the number of milestone activities, the client’s payment proportion, or the project deadline, the contractor’s maximal cash flow gap decreases.

Tax Time: How Families Manage Tax Refunds and Payments

Every spring, more than a half trillion dollars flow into and out of the financial accounts of American families as they reconcile taxes paid against taxes owed for the prior year. The JPMorgan Chase Institute analyzed daily financial flows and balances for families who receive tax refunds or make tax payments in order to understand the impact of tax reconciliations on families’ financial lives. We examined inflows, expenditures, net savings, account balances, and credit card balances to provide a comprehensive view of how families manage positive cash flow from tax refunds and negative cash flow from tax payments. The report leverages high-frequency, de-identified financial data from a base sample of 8.3 million families who used a Chase checking account to receive a tax refund direct deposit or make an electronic tax payment in 2015, 2016, or 2017. Our analysis uncovers six key findings illustrating how families manage tax refunds and payments. First, we observe that four-fifths of our sample received one or more refunds and made no payments. Refund recipients tended to have lower average incomes and smaller cash buffers than those making tax payments. Second, among participants in our sample, tax refunds amount to almost six weeks’ take-home income for the average family receiving them. For families making a tax payment, the average payment is equivalent to 2.5 weeks’ income. Third, for families receiving average expenditures increase sharply as soon as the refund is received. Six months after the refund, families still have an average of 28 percent of their tax refund remaining. Fourth, we find that expenditures on durable goods, credit card payments, and cash withdrawals increase most sharply upon receipt of a tax refund. We also observe families that make tax payments and find that families for whom the refund has a larger cash flow impact increase their spending and saving most sharply when it arrives. Additionally, on average, families who make a tax payment cover that payment with cash already available when it is due. Once the payment is made, spending and saving patterns quickly return to their previous steady state. Taken together, our findings indicate that the tax system is a primary tool by which many families generate lump sums of cash and that tax refunds are a major financial event that resets the spending and saving patterns of families who receive them.

The concept of the real estate portfolio matrix and its application for structural analysis of the Polish commercial real estate market

This paper presents an innovative model for property portfolio assessment based on the concept of a growth-share matrix. The proposed real estate portfolio matrix uses two primary qualities of properties: their potential to accrue value over the holding period and their ability to generate stable positive cash flows. The aim of the model is to utilise these two dimensions in the assessment of the qualities of individual properties and to identify their subsets to meet preferences of different groups of real estate investors. The concept was developed to provide companies with strategic advice on how to optimise the sales strategy of their non-core property assets. This method can be applied successfully to both commercial and residential properties. The concept is subsequently utilised for the purpose of post-hoc structural analysis of the Polish commercial real estate market. Transaction analysis accentuates the prevalence of core assets in terms of both transaction volume and value. Value-added assets constitute a much smaller market segment but may nevertheless present a good opportunity for portfolio diversification. Speculative assets appear to be scarce, which is characteristic of the current phase of real estate market conjuncture.

The Effect of Government Regulation on Coal as Export Commodities and Downstream Effort Through Coal Liquefaction (Systems Dynamic Modelling Approach)

Coal is still treated as an export commodity. On the other hand, the government is expecting additional value from the coal sector, among other, through coal liquefaction. The role of the government has been demonstrated through regulation, but there have been no concrete results to realize the downstream effort of coal. To find out to what extent is the optimum coal composition between the coal exported as commodity and coal used for liquefaction, it is analyzed by systems dynamic modeling method in several scenarios. The results show that there are several scenarios that suitable as Government alternative by fine-tuning the royalty instrument and the portion of state revenue. Scenario II plausibly be the best proposal that is to seek coal for downstream effort through liquefaction in order to liquefy the coal by 50%, while still allocating the remaining portion for the sale of coal as a commodity. This is reinforced because factually there is portion of coal as a commodity being sold domestically as fuel of power plant (PLTU). In Scenario II, coal liquefaction begins to provide a positive cumulative cash flow difference to the baseline after assuming a pre-set condition of royalty at 0% and the state revenue portion in the range of 60% - 80%. The imposition of a royalty of 5% can still be maintained, provided that it remains collaborated with a decrease in the portion of state revenue. This is because the decline in the portion of state revenue is very significant in increasing the cumulative cash flow of coal liquefaction. The state revenue portion can be installed in the range of 60% - 70% on the grounds that this coal liquefaction activity is a process of increasing the value-added that has an impact on the economy.

What Conditions Make Proton Beam Therapy Financially Viable in Western Canada?

BackgroundProton beam therapy (PBT) is available in many western and Asian countries, but there is no clinical, gantry-based PBT facility in Canada.MethodsA cost analysis was conducted from the Alberta Ministry of Health perspective with a 15-year horizon. Estimated costs were: PBT unit, facility development as part of an ongoing capital project, electricity, maintenance contract, and staffing. Revenues were: savings from stopping USA referrals, avoiding the costs of standard radiation therapy (RT) for Albertans receiving PBT instead, and cost-recovery charges for out-of-province patients.ResultsThe Ministry of Health funded 15 Albertans for PBT in the USA in the 2014/15 fiscal year (mean CAD$ 237,348/patient). A single-vault, compact PBT unit operating 10 hours/day could treat 250 patients annually. A 100 Albertans, with accepted indications, such as the curative-intent treatment of chordomas, ocular melanomas, and selected pediatric cancers, would likely benefit annually from PBT’s improved conformality and/or reduced integral dose compared to RT. The estimated capital cost was $40 million for a single beamline built within an ongoing capital project. Operating costs were $4.8 million/year at capacity. With 50% capacity reserved for non-Albertans at a cost recovery of $45,000/patient, a Western Canadian PBT facility would achieve net positive cash flow by year eight of clinical operations, assuming Alberta-to-USA referrals reach 21 patients/year by 2024 and increase at 3%/year thereafter. Sensitivity analysis indicates the lifetime net savings is robust to the assumptions made.ConclusionThis business case, based on Canadian costing data and estimates, demonstrates the potential for a financially viable PBT facility in Western Canada.

Accelerating Venture Milestone Achievement: Examining the Impact of Resource Acquisition Timing

This study examines how resource acquisition timing affects a venture's ability to accelerate milestone achievement. We examine acquisition timing decisions for three types of resources: material resources, facilities and equipment resources, and human resources. Two venture milestones are examined: accomplishment of the first sale and achievement of positive cash flows. We theorize that resource acquisition timing can impact the degree of resource availability delays and the rate of resource-driven cash outflows/inflows, which, in turn, determine the time to first sale and the time to positive cash flows, respectively. Our results demonstrate that decisions concerning resource acquisition timing could have contradictory effects vis-à-vis shortening the time to first sale versus shortening the time to positive cash flows. These findings highlight the difficult tradeoffs that ventures have to navigate when making resource acquisition decisions, which have implications for multiple milestones across a venture's lifecycle. Finally, the paper demonstrates how technological novelty moderates, and, in fact, radically alters, the relationship between the timing of resource acquisitions and the time to venture milestone achievement.

Economics of alternative catfish production technologies

The US catfish industry has shown increasing trends toward intensification of production as a means of achieving cost efficiencies on farms. Previous studies depicted the potential for cost efficiencies in alternative technologies such as split‐pond systems, intensively aerated ponds, and in‐pond raceway systems. This study provides an economic comparison of these systems under a uniform set of economic assumptions using a standard enterprise budget analysis. Cost of production of hybrid catfish raised in these systems ranged from $2.03 to $2.91/kg, the highest cost being that of in‐pond raceways and the lowest from split ponds. Positive annual net cash flows from split‐pond systems and intensively aerated ponds were sufficient to make the investment profitable. Cumulative effects of high investment cost (high annual fixed costs), poor survival, and lower yields from the in‐pond raceway systems made it economically infeasible. However, the feed conversion ratio (FCR) was the best among these technologies. Risk analysis showed stochastic dominance of intensively aerated ponds and split‐pond systems over in‐pond raceway systems. Variations in catfish price, yield, and FCR were the major contributors to economic risk. Implementing combinations of intensively aerated ponds and split‐pond systems should be viewed as a strategy to respond to production and market needs.

Is the Permian Barreling Toward a Breaking Point?

The next year could spell trouble for operators producing oil in west Texas and southeastern New Mexico. The Permian Basin currently has more crude than it can handle, and production there continues to grow at a steady rate month-over-month after surpassing 3 million B/D earlier this year, according to data from the US Energy Information Administration. Pipeline takeaway capacity isn’t sufficient and won’t be until the second half of 2019. There aren’t nearly enough trucks or truck drivers to make up the difference, and any meaningful expansion of crude-by-rail transport is restricted by infrastructure and business-related constraints. Both options are already competing with movement of equipment and supplies such as sand and water, demand of which has also grown—along with their costs—to support the continued production growth. Many operators in the basin struggled to generate positive cash flow even before the bottlenecks became an issue. Now, the price of the crude they’re producing is trading at a big discount vs. spot prices in Houston, near the Gulf Coast refining and export center; and Cushing, Oklahoma, the crude trading hub from which the West Texas Intermediate (WTI) price is derived. The spread between Midland crude and WTI grew to double digits in May, spiking from roughly $1 a couple months earlier. If WTI prices were closer to where they were a year ago, the impact of the spread immediately “would have been significant for almost every operator,” noted R.T. Dukes, Wood Mackenzie US Lower 48 upstream research director. Fortunately for Permian operators, WTI prices have been much higher than the range of prices for which they budgeted coming into the year, minimizing the impact of the spread thus far. But WTI prices aren’t guaranteed to remain that high, and differentials could grow—just look at the Western Canada Select heavy crude price, which has traded at up to a $30/bbl discount to WTI this year due in large part to transportation constraints. The spread forced operators such as Cenovus, Husky Energy, and Canadian Natural Resources to slow their oil sands production during the first quarter. Permian operators are similarly being forced to examine whether continued growth over the next year is sustainable or even worthwhile. Their exposure to Midland spot prices varies, ranging anywhere from less than 5% to 50–60% of Permian production, said John Coleman, Wood Mackenzie senior analyst, North American crude oil markets. Most operators are in the 20–30% range, meaning there already has been a modest hit to cash flow, he said. Consultancy Rystad Energy believes the Midland vs. Cushing spread will “stay very much depressed” into mid-2019 and “won’t be surprised” if it moves into the low $20s/bbl, said Artem Abramov, Rystad vice president, shale analysis. “Everything points to the situation getting worse and worse going forward.”

Public Support of Solar Electricity and its Impact on Households - Prosumers

Abstract Background and Purpose: Currently, the idea of households - prosumers is broadly discussed in public governments, mainly in connection with both the energy security issues and the environmental issues. Therefore, the main goal of this paper is to present new agent model of household - prosumer and to compare two scenarios – “off grid household” and “on grid household”. The additional goal is to evaluate the impact of public support of solar electricity on the economic efficiency of household – prosumer projects (systems). Design/Methodology/Approach: The model is structured as a micro-level agent model, representing one household – prosumer. The model has the following general characteristics: one household with own electricity generation (photovoltaic panels), battery and in case of “on grid household” also connection to the grid. The main goal of the agent is to cover electricity consumption in household with minimal costs. The agent model of prosumer is tested and validated, using the empirical data. Results: The highest level of subsidy has significant impact on the economic indicators of selected scenarios. It causes lower investment costs at the beginning of the project and consequently shorter payback period (3-4 years earlier), positive cumulative cash flow, net present value and IRR in earlier period (approximately 5-10 years earlier, depending on the scenario). Conclusion: We can recommend to the government to continue with current system of subsidies, since it contributes to better economic indicators of particular solar electricity projects. On the other hand, the level of subsidy should be at least the same as in current year 2017, for the purposes of representing the significant part of the investment costs. Low level of subsidy has negligible impact on the economic indicators of households – prosumers projects. The developed agent model is suitable for the evaluation of economic impact of public support on households – prosumers.

Costs and benefits of a leaf beetle Integrated Pest Management (IPM) program II. Cost-benefit analysis

ABSTRACTForest health and biosecurity programs rarely capture sufficient data to enable thorough cost-benefit analyses to be done. One notable exception has been Forestry Tasmania’s research project to develop and use an Integrated Pest Management (IPM) program for the leaf beetle Paropsisterna bimaculata. For this project we were able to estimate all major costs and benefits in monetary terms for the period 1975–2034, to allow analysis of a ‘control’ and a ‘no control’ option across a full rotation.Overall, the 1975–2034 leaf beetle IPM project provided a net positive return at a 5% discount rate. However, the case study was atypical because research commenced nearly three decades before the IPM program was used operationally in the expanding eucalypt plantation estate. For this reason, the year 1990, when research on the precursor of the operational IPM program commenced, was chosen as the default base year for commencing cash-flow analyses. The present value (in AU$ as at 2015) of the total expenditure between 1990 and 2034 on research to develop the leaf beetle IPM program and on its operational use was $5.4 million, of which nearly 60% was expended on research. The research costs included costs to develop the operational IPM program using conventional insecticides and costs involved in unsuccessful attempts to develop an IPM program using more environmentally friendly control options. When research expenditure was restricted to that needed for developing an IPM program using conventional insecticides, the internal rate of return from the project exceeded 7.5%. Additional timber yields from using the IPM program translated to additional revenues, which resulted in positive cash flows after 2011. The benefit:cost ratio resulting from the operational use of the IPM program (treating research expenditure as sunk costs) was 7.5.The long interval between commencing research, and applying the IPM program operationally once the plantation estate had become established, is not typical of the circumstances relating to future pest threats. Nonetheless, the findings from our study are still relevant to projects involving future pests that may cause similar damage. Another finding of the study was that research needed for future projects to develop an operational pest management program will provide greater benefit if done centrally and the resultant program adopted broadly by as many affected plantation owners as possible.

The Effect of Business Intelligence and Intellectuals Capital of Company Value Moderated by Management of Profit Riil

The research purposes to analyze the influence of business intelligence and intellectual capital on firm value, and also the role of real earnings management as moderated variable. This research used annual report as secondary data. The number of beginning samples were 420 manufacturing firms. The final samples were 284 samples had a positive cash flow, because this study did not use samples with negative cash flow. This research uses moderated multiple regression and treat real earnings management as pure moderated variables. The results showed that business intelligence and intellectual capital had positive effects on firm value. Moreover, real earnings management significantly moderated the relationship between business intelligence, intellectual capital and firm value. The implication of the research showed that the company must give attention to business intelligence, intellectual capital and real earnings management. All independent variables can explain 86% of the variation in firms value.

Use of CSM-CROPGRO-Cotton to Determine the Agronomic and Economic Value of Irrigation to Upland Cotton Production in North and South Carolina

Abstract. Although prior research has shown that irrigation can increase cotton fiber yields in coastal plain soils of the Carolinas, only 2.7% of North Carolina’s and 7.8% of South Carolina’s planted hectares are irrigated, compared to 39% nationally. Little research has addressed the impact of compacted subsurface soil layers on the value of irrigation. Economic analysis of irrigation is also difficult due to the lack of long-term irrigation data for the region. The objectives of this study were to adapt the CSM-CROPGRO-Cotton simulation model to production conditions in the coastal plain of the Carolinas and use it to evaluate both the agronomic and economic value of irrigation to upland cotton production. Field data collected near Lewiston-Woodville, North Carolina, in 2015-2016 were used in model calibration and validation. Soil profiles were established using historical weather and cotton yield data for 16 cotton-producing counties in North and South Carolina from 1979 to 2015. Soil profiles were fit both with and without a root-restrictive (compacted) layer for each county. To evaluate the value of irrigation for these counties, simulations were conducted using ten irrigation levels, including non-irrigated, triggered when plant-available water (PAW) reached a maximum allowable depletion of 50%. The economic analysis made use of Cotton Incorporated’s Cotton Irrigation Decision Aid to determine the economic feasibility of irrigation using investment analysis tools such as cash flow, payback period, and net present value (NPV). Predicted agronomic and economic responses to irrigation were strongly dependent on seasonal rainfall. Fiber yield of non-irrigated cotton was reduced by more than 10% of fully irrigated cotton yield in more than 70% of the site-years simulated. This study suggests that irrigation is a feasible investment for cotton producers in North and South Carolina, as positive average cash flows and NPVs were observed over all counties and soils evaluated. Keywords: Cotton, CROPGRO, Crop simulation model, Economic analysis, Irrigation, Water use efficiency, Yield loss.