586 



SHALL I BE A FRUIT GROWER? 



always be caused by failure to make a profit, and, conversely, 

 it may be that the type of soil, variety of trees, etc., make the 

 possibility of converting the business into a profitable enter- 

 prise out of the question. The value of experience behind the 

 planting of a new orchard or the purchase of a ^^going concern" 

 cannot be underestimated. It is most essential if the indi- 

 vidual is to judge fairly what he is getting for his money. 



The original capital investment cannot be neglected in com- 

 puting the cost of producing the fruit. High land values can 

 be as instrumental in eating up profits as any other one factor. 

 While it does not pay to buy poor land, it is equally important 

 to ^^get your money's w^orth." 



Cost of Production. Though the price which fruit is to 

 bring can hardly be estimated with any degree of accuracy, 

 there is some possibility that the cost of producing the fruit 

 can be determined fairly well. This is true because some ex- 

 penses w^ill occur each year with little variation. They are as 

 important as they are unavoidable, and they serve, in more 

 cases than not, to determine the financial success or failure 

 of the enterprise. Since they vary little, and certainly, over a 

 short period, show little relationship to the fluctuations in the 

 income, the expenses are commonly termed '^fixed costs." They 

 are 



1. Interest on investment. 



2. Depreciation. 



3. Taxes. 



4. Insurance. 



Interest on investment reflects the original cost of the 

 land. While interest rates have shown some decline over the 

 past 80 years, the value of the land has increased suSiciently 

 to more than outweigh this advantage. Land is but a part of 

 the total investment. A significant part of the permanent capi- 

 tal is tied up in buildings and equipment. It is of equal im- 

 portance that the interest on the money used to carry these 

 items also be included. 



