Evaluation of the Feasibility of Milk Processing Business Investment in West Sumatera
Keywords:
Evaluation, investment feasibility, milk processing industryAbstract
Dairy products are beneficial for human health. The implementation of investment for the milk processing industry has a strong relationship with the aspect of financial feasibility. Based on this, the implementation of investment for the milk processing industry requires a study of the cost structure and financial feasibility. The purpose of the study was to determine the evaluation of the feasibility of investment in milk processing businesses in West Sumatra with several criteria: Net-Benefit Cost Ratio (Net-B/C-ratio), Net Present Value (NPV), Internal Rate of Return (IRR), and Payback Periods (PBP). The research method uses a survey; the data collected is primary data and secondary data. The results of the cost structure study for the milk processing industry with a production capacity of 300,000 liters of pasteurized milk and 24,000 liters of yogurt each year require a total investment cost of Rp 2,776,620,000, consisting of fixed investment costs of Rp 2,524,200,000 and working capital costs of Rp 252,420,000. The depreciation value each year is Rp171,983,000. The production cost (total fixed costs and variable costs) is Rp. 6,237,533,000, - per year, with revenues of Rp. 6,840,000,000, - per year, and net income after income tax of Rp. 469,924,260, - per year. The results of the analysis of investment feasibility criteria The average Net-B/C is 2.5, NPV is Rp 5,292,392,421, IRR is 22.9%, and PBP for 5 years is 2.9 months. Based on the results of the investment analysis for the milk processing industry in West Sumatra, it is financially feasible with high profitability.
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