In the article capital budgeting and investment analysis techniques, proposed by various authors, to be adapted in agro-based
industries has been discussed. Agro-based
industries play a pivotal role in the economic development of a country, where agriculture is the mainstay of their Gross Domestic Products (GDP). To encourage the investment in this sector, proper evaluation methods must be adopted depicting a clear picture of the cost of investment, risk and return on their investment. Some of these techniques were tested for the Pre-feasibility study on Fruit & vegetable products in N.W.F.P., Pakistan. Agricultural may be divided into four main sectors, i.e., crops (major and minor), livestock, forest and fish products <1>. The total amount of Gross Domestic Product of Pakistan was 2784986 millions rupees (at Current Factor Cost) in 1998-99. Agricultural and
Industrial sector wise contribution (at Current Factor Cost) for the same period was 717498 and 704166 million rupees, i.e., 25.76 % and 25.28 % respectively <2>. Agricultural products are used in the households, are being exported, as well as all of them may be used as raw materials for industries and is one of the great source of income of the country. In Pakistan, Agriculture sector employees 48 % of the manpower <3>. Industrial sector is comprised of mining & quarrying, manufacturing (large-scale and small-scale), construction and electricity & gas distribution. The industrial sector has a contribution of 704166 million rupees, i.e., 25.28 % of the GDP of Pakistan <2>.