What is the expected ROI that an investor would look for in an aquaculture farm?
Image by Bytemarks
November’s Bytemarks Lunch visit to the McKinley aquaculture fish farm.
Question by Koonitdo: What is the expected ROI that an investor would look for in an aquaculture farm?
Would like to know some opinions on what should an investor’s expected ROI be in a aquaculture farm? No doubt the higher the better but a number would be nice to use as a gauge.
What do you think? Answer below!
One Response to What is the expected ROI that an investor would look for in an aquaculture farm?
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Without going through the business plan, the investor cannot ascertain if any of the assumptions are reasonable or what the business risks are involved and to what extent.
Only a very rough ballpark guess can be made, as outlined below:
a. The normal average rate of return would be at least 25 to 30%.
b. With an aquaculture farm start-up, the probability of success would be perhaps 50-50, and the question remains of whether the original investment would ever be recovered.
c. Hence, assuming that the original investment would be recovered in the event of a failure, I would look for an indicated rate of return of 50 to 60% to realize the average of 25 to 30% which I would consider as the expected ROI.
d. If there is no certainty that the original investment would be recovered, then the CASH FLOW should include (100% of the original investment/probability of success) plus the 50 to 60% required rate of return.
sandyaa
May 30, 2011 at 5:37 pm