Across the world, almost every person thinks of investing to realize profits. It is therefore vital for every investor to make sound decisions based on capital budgeting. For instance, Michael Evans decides to invest through a well-outlined investment plan. Considering the investment plan of Michael Evans, it would be a good idea if Michael initiates it. From the financial analysis of the investment plan, Evans could have used a total of $3,515,000 in purchasing the land and coming up with the well, irrigation system, underground power lines, room, and the grapevine plants. Being an investor, Michael should have taken the risk knowing that the results would be of great benefit.
Contrasting this with the price that Evans is willing to give out the land, selling the land would be much profitable than keeping it. In the business world, this is what can be termed as increasing the profit margin in a timely manner. Evans wants to sell the land at a price of $55,000 per year. Assuming that he managed to sell all portions of the land, Evans could have made $57,530,000. It could take a couple of years or Evans to get such a profit of $52,446,000 considering that he had irrigated, mowed, and pruned the firm.
Furthermore, Evans has still invested in the same farm. He offers planting and harvesting services to the buyer of the land. By offering these services, Evans will make a profit of $403.5 per acre of land. Assuming he has sold all portions of the land, Evan could earn a profit of $422,061 per year. Therefore, Evans investment plan would be a good investment if implemented. However, keen considerations should be taken during the implementation process to prevent losses that may come about in the course of implementing the agreed investment plan.