##plugins.themes.bootstrap3.article.main##

Anang Junaidi I Ketut Gunarta

Abstract




PT CFC, a cigarette filter manufacturer, sells the latest patent product
capsule cavity sensation filter to MNC Korea's cigarette factory. MNC delivered latest
view forecast demand contract, of 356.75 million cigarette filters in totals, period
January 2023 to July 2024, which to be marketed in Asia and the Commonwealth of
Independent State (CIS) countries. Hence, to decide the feasibility of the project,
requires research and analysis whether the project is profitable or detrimental.
Objective of this research are to assist PT CFC in taking decision of those above
project, by using 2 approach methods, 1). Project Management, aiming to get an initial
outlay . 2). Financial Valuation through income approaches (Initial Outlay, cash flow,
terminal cash flow, working capital, PP, IRR and NPV). From the research study, the
Initial Outlay it cost GBP 1,552,410 which generating from project management
through LM (logic Model), WBS (work Breakdown Structure) and AP (Activity
Plan)). Annual cash flow will be minus at the 1
year of project started, by GBP 185K,


but in the 2nd year positive of GBP 832K, overall project during contract
demand period will positive of GBP 647K and terminal cash flow at the end of the
project delivered GBP 1.471K. By using CAPM method PT CFC required return
18.01%, contribute from risk free return 3,509%, beta coefficient 1.27, and an
annualized return 15%. Capital structure, planned and decided to using 100% equity,
which resulting of WACC 18.01%. According to above data, financial valuation could
be define, the Payback Period achieved 1.2 years. Internal Rate of Return counted
350% higher compare to WACC 18.01%. Net present value positive of GBP 1.739K.
Hence refers to valuation parameter above concluded that, the project investment was
feasible and can be continued into project execution.




Downloads

Download data is not yet available.

##plugins.themes.bootstrap3.article.details##

How to Cite
Junaidi, A., & Gunarta, I. K. (2023). VALUATION OF CONTRACT DEMAND VOLUME OF NEW GENERATION PRODUCT (NGP) CAVITY FILTER CIGARETTE PROJECT USING INCOME APPROACH IN CIGARETTE FILTER COMPANY (PT CFC) . Business and Finance Journal, 8(2), 174–180. https://doi.org/10.33086/bfj.v8i2.5224
Section
Articles
Project Management, Financial Valuation, Initial Outlay, Annual Cash Flow, Terminal Cash Flow, Cost of Capital, NPV, IRR, Payback Period

References

András Nábrádi, László Szôllôsi, International Jurnal, Key aspects of investment analysis. https://core.ac.uk/download/pdf/160835572.pdf. Diakses pada 20 September 2022.

Arthur J. Keown, John D. Martin, J. William Petty ; Foundations of Finance: The Logic and Practice of Financial Management, Edition, 6, illustrated ; Publisher, Pearson Prentice Hall, 2008

Haotian Dai1, Ningfan Li,Yuhan Wang, Xinrui Zhao, 2022, International Jurnal, The Analysis of Three Main Investment Criteria: NPV IRR and Payback Period (2022). https://www.antlantis- press.com/article/125971510.pdf. Diakses pada 20 September 2022.

Joseph Heagney, Fundamental Of Project Management, 4th Edition, https://www.nesacenter.org/uploaded/conferences/SEC/2014/handouts/Rick_Detwiler/ 5_Detwil er_Resources.pdf . Diakses pada tanggal 18 oktober 22’.

Larson, E., W., Et Al (2011). Project Management: The Managerial Process. McGraw Hill/Irwin.

Logic Model Work Book, Logic Model Training Handouts (pointk.org). Diakses pada tanggal 13 ferbruari 2023.

Market Return, Beta value London Stock Exchange. www.yahoofinance.com . Diakses tanggal 13 Februari 2023. Menghitung Cost of Equity Dengan Metode CAPM, Cara Menghitung Cost of Equity dengan Metode CAPM - Daniel (danieel.id). Diakses pada tanggal 12 februari 2023.

Ross, Westerfield and Jordan (2011), Fundamentals of Corporate Finance– Standard Edition.

United Kingdoom Coorporate Tax Rate, United Kingdom Corporate Tax Rate - 2022 Data - 2023 Forecast - 1981-2021 Historical (tradingeconomics.com) . Diakses tanggal 12 Februari 2023 United Kingdom Government Bond 10Y, United Kingdom Government Bond 10Y - 2023 Data - 1980- 2022 Historical - 2024 Forecast (tradingeconomics.com), Diakses pada tanggal 12 februari 2023.

World Bank Group, Project Management Essentials Workshop and Trainning , https://olc.worldbank.org/sites/default/files/Project%20Management%20Essentials%2Materials_0.pdf. Diakses pada tanggal 18 Oktober 2022

Product Life Cycle. https://venngage.com/blog/project-life-cycle/ Diakses pada 30 November 2022

Yasotharalingam, Lingesiya (2016) Capital budgeting theory and practices. (PhD Thesis), Kingston University. Capital budgeting theory and practices - Kingston University Research Repository. Diakses pada 20 Oktober 2022.

Yi Wang, 2021, International Jurnal, The Development and Usage of NPV and IRR and Their Comparison. https://www.antlantis-press.com/article/1259666320. Diakses pada 20 September 2022of types of references).

Anang Junaidi, Institut Teknologi Sepuluh Nopember

I Ketut Gunarta, Institut Teknologi Sepuluh Nopember