Investment in Forest Watershed-A Model of Good Practice for Sustainable Development of Ecosystems

Estimating the efficiency of the investments that generate public benefits is not an easy task, as there are various methods proposed for evaluating the value of public goods and services. The novelty of the study consists of the proposed cost-benefit methodology adapted to a real-value cost concept for estimating the efficiency of the investment in the hydrographic Fancel watershed, in the center of Romania, using a set of five indicators. The results prove that an investment of RON 1,323,226.29, at the value of 2018, would be paid in 5 years, 0 months, and 15 days. The estimated income is RON 505,327.8/year, so at a 5% financial-discount rate and an estimated period of use of 30 years, the net present value is RON 5,612,730.67. The internal rate of return was calculated as 22%, whereas the value of the savings-to-investment ratio is 3.6%. The main findings of the analysis of the economic-efficiency indicators offer a synthetic and relevant image of the fact that the investment has proven to be effective under the analyzed conditions. The results offer arguments to assume that the decision to consider that particular investment a good practice is fulfilled.