The additional value that can be gained from selecting stud and commercial rams based on genomic information was evaluated for Merino studs using two different breeding objectives. Selection index theory and gene flow methodology were used to contrast the accuracies and selection responses of indexes using phenotype information only, with those using additional genomic information of either high or low accuracy and selecting males at one year of age. With the inclusion of genomic information and earlier selection index accuracies increased and an additional 11-64% in commercial dollar value per ram could be gained from genetic improvement. The breakeven point for DNA testing was evaluated to be between $13.04 and $64.48, depending on the breeding objective and the accuracy of the genomic information.