INTRODUCTION
Turkey lies in the 3642° north latitude and 2645° east longitude and possesses a wide rage of climatic conditions from might mild Mediterranean to cold continental that enable the cultivation of more than 75 crop species. Peach and cherry can be grown in various region of Turkey^{[13]}. They are widely grown in Amasya province in Middle Blacksea Region and cover 48.93% of total planted fruit area.
An orchard is a longterm including establishment and maturity period investment and careful planning is essential to ensure economic success^{[4]}. The producer would like to know the results of his economic activity by working out a detailed costbenefit analysis of the investment in the project. Although the technical aspects of fruit production have been studied extensively, quantitative studies related to the economics of such farms are limited in literature. Therefore there is still a need for further study; especially at the local level. The main objective of the study was to analyze the feasibility and profitability of investment in fruit farms.
MATERIALS AND METHODS
In the study, the data were obtained from the annual cost table prepared by
the Research Institute of Rural Services in the region for the year of 2003.
The economic life of the activity is taken as 20 years for peach and 25 years
for cherry. Establishment period for peach and cherry are 5 and 4 years, respectively.
The profit was calculated and compared with real interest rate to find opportunity
cost of enterprise.
The consensus in the investment literature is that if the objective of a firm is the maximization of profit or wealth of a business, then the Net Present Value (NPV) model is the appropriate procedure to evaluate investment decisions^{[5]}. The NPV is the total present value of future revenue and cost of an activity^{[6]}. The NPV was calculated by the formula NPV = FV/ (1 + i)^{n [7]} where, FV is the future value of money, i is the interest or discount rate and n is the number of years.
Among the measures of investment returns over time, NPV offers the better measure of project worth^{[8]}.
The CBR is the ratio obtained when the present worth of the benefit stream
is divided by the present worth of the cost stream^{[9]} and can be
obtained as fallows^{[10]}:
where, R is the total revenue, C is the total cost, i is interest rate and
n is the number of years and q^{t }= (1+i)^{t}. If CBR>1,
then the total revenue is greater than the total cost, If CBR = 1 then the total
revenue is equal to the total cost and If CBR<1 then the revenue is less
than the total cost.
The internal rate of return is a useful measure of project worth^{[9]}
and helps to determine the relative profitability of an investment^{[7]}.
IRR is discounted rate, which makes Net Cash Flows of the economic life of project
zero^{[11]}. The IRR formula is as follows:
where, r_{1 }is the last discount rate which makes NPV positive, r_{2 }is the fist discount rate which makes NPV negative, ND_{1} is the last positive NPV, ND_{2} is the first negative absolute value of NPV.
Sensitivity analysis is described as a technique for measuring the impact on project, while changing one or key input values about which there is uncertainty^{[12]}.
RESULTS AND DISCUSSION
Establishment cost is an investment that takes time to pay off^{[13]}. The establishment costs of peach and cherry production are given in Table 1.
Table 1: 
The establishment cost of the farms ($/da) 

(a) Cover pesticide, fertilizer, irrigation and labor costs,
(b) The unexpected costs (transaction cost, transportation cost, labor and
etc.), which occur during establishment period^{[14]}, (c) The interest
rate of capital is 10% of total fixed establishment^{[15]}, (d)
Management cost is taken as 3% of total establishment cost^{[16]}. 
Table 2: 
The production costs ($/da) 

(*) Management cost is 3% of gross production value 
Table 3: 
Income in the farms ($/da) 

Table 4: 
Cash flows in the farms ($/da) 

As it can be seen from Table 2, the variable costs have a share of 71.4% for peach and 75.5% for cherry in total production cost. With a 40.7%, maintenance has the biggest share for peach and with a 47.2%, harvestingtransporting for cherry in the variable costs.
As it can be seen from Table 3, the annual revenue of the producer is coming from the principal product and intermediary income.
Table 5: 
Costbenefit ratio according to 10, 8 and 5 discount rates 

Table 6: 
Sensitivity analysis 

The annual profits (cash flows) were calculated by subtracting the annual costs from annual revenue for a period of 20 years for peach and 25 years for cherry (Table 4).
The establishment year is taken as a base and from the following year to the end of economic life was taken as production period. The choice of discount rate is determined by the investor’s assumptions about inflation, risk and earning potential of other investments. If a producer is financing the investment internally, then the loan rate would be replaced by the producer’s opportunity cost in the computation. Therefore different discount rates (10, 8 and 5%) were used in the study. NPV of the period was calculated and given in Table 5.
The NPV achieved for each discount rates are 32.0, 131.7 and 340.5 $/da, for peach, respectively. The NPV achieved for each discount rates are 3573.1, 4453.4 and 6327.5 $/da, for cherry, respectively.
CBR is calculated by dividing the total discounted incomes by the total discounted costs. The CBR in all the three discount rates is greater than 1 for peach and cherry (Table 5). This means that the producer has a positive return in the production of peach and cherry.
IRR was found as 10.78% for peach and 47.13% for cherry, which are greater than the interest rate of capital. This means that the farmers were making more than four times of capital interest in the cherry production.
In the sensitivity analysis, tree different NPV, CBR and IRR were found under the three different assumptions. When a 10% total cost overrun and 10% reduction of product price were assumed (Table 6), the IRR’s for peach decreased from 10.78% to 1.84 and 0.71%, respectively and the IRR’s for cherry decreased from 47.13% to 44.5 and 44.5%, respectively. The results showed that the IRR’s for cherry are greater than the interest rate of capital.
In the light of the findings determined from the present study, it can be concluded that the cherry farming can be one of the most important income sources for the fruit farmers of rural provinces of Amasya, Turkey.