(GP/GT) for Additional Water Supply in the Lower Rio Grande

for those rose plants remain constant. Therefore, this study refers to
what are normally variable expenses as production expenses. Fixed
operating expenses continue to be referred to as fixed expenses.
PRODUCTION EXPENSES: Production expenses for both regular
and H.LD. electricity (where applicable), heat, water, C02, chemicals,
and fertilizer are based on the assumed rates of usage. Estimates for
year one are for six months of production; estimates for the
remaining years are based on twelve full months of production.
FIXED OPERATING EXPENSES: Administrative salaries including
the owner/manager, grower, sales, legal/accounting, and
maintenance positions are assumed to be fixed annual salaries.
Because planting and production will not begin until aiter the sixth
month, year one salary estimaJes are lower than those of later years.
Allowances for annual salary increases are not included in this study.
Hourly wages are assumed for laborers and are estimated to
begin in the sixth month. Hourly wages are also assumed for
delivery personnel. These costs are not incurred until year two.
F.I.C.A. and S.U.T.A. costs are incurred in direct proportion to
both fixed and hourly annual wages paid. Workers' Compensation
costs are based on annual wages paid to laborers and to delivery and
maintenance personnel.
Cost estimates for trash disposal, crop insurance, property
insurance, overhead, repairs and maintenance, and vehicle operation
and maintenance were obtained either from conversations with local
growers or from published reports. These costs are pro-rated for
year one, and it is assumed that they will remain constant for the
following nine years.
OTHER FIXED EXPENSES: Other fixed expenses include the
breakdown of principal and interest in the total annual loan
payment.
TAXES: Federal and state income taxes are calculated based on
the tax rates (see Note 1).
CASH FLOWS: Year-end cash flows are determined by
subtracting net cash inflow after tax balances from beginning cash
flow balances. The year-one beginning cash flow amount is obtained
from the "Assumptions" section.
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