An investor is exploring the possibility of building a chemical plant that can produce product Z. Based on the report pr
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An investor is exploring the possibility of building a chemical plant that can produce product Z. Based on the report pr
An investor is exploring the possibility of building a chemicalplant that can produce product Z. Based on the report provided bythe consultant, it is known that the investment cost for thedesired process technology, with a production capacity of 800,000tons/year, is IDR 500 billion.Investment financing consists of:- 70% factory establishment cost(depreciated on a straight-line basis over 5 years, and theresidual value of property, plant and equipment is 20% of theinitial value)- 30% working capitalThe composition of the investment funding is 75% loans from bankswith 15% interest rates, and the remaining 25% is equity with 10%cost of equity.Production costs for a capacity of 500,000 tonnes areestimated:- fixed costs: IDR 70 billion/year- Cost change : IDR 50,000 / ton of productThe selling price of product X is IDR 1,000,000/ton, and the profitis subject to a 25% tax. For a 5 year analysis period, you arerequired to:1. Prepare cash flow projections from the investment plan.2. Calculating PAYBACK PERIOD, IRR.3. Determine the break-even point of production (BEP).4. Calculating WACC and MARR.5. Write down your analysis of the investment plan.