Capital Budgeting Analysis of Broiler Farm Construction in Central Java
Journal Title: International Journal of Current Science Research and Review - Year 2023, Vol 6, Issue 12
Abstract
Indonesia, positioned as a prominent emerging market, draws its economic strength from a diverse mix of agriculture, manufacturing, and a thriving services sector. The nation’s strategic location, coupled with abundant resources and a youthful population, forms a resilient economic foundation that has contributed to its sustained growth. One notable sector that plays a pivotal role in meeting the country’s protein needs is the poultry industry. Chicken consumption has risen to 7.41 kilograms per capita yearly, indicating a substantial 9.23% increase from 2020. Against this backdrop of economic vibrancy and shifting consumption patterns, PT.XYZ, a key player in the poultry industry, is strategically positioning itself for expansion. Recognizing the immense potential within Indonesia’s dynamic poultry sector, PT.XYZ is planning to enhance its broiler meat production capabilities through the construction of new broiler chicken farm facilities. This research endeavours to provide PT.XYZ with a comprehensive feasibility analysis for the envisioned broiler chicken farm facilities. The proposed facilities are designed to produce a significant volume, with a capacity of up to 16.8 million chickens annually, equivalent to approximately 29,3 million kilograms of chicken meat per year. The construction timeline is strategically set for two years, spanning from September 2024 to October 2026. The research findings present a compelling case for the feasibility of PT.XYZ’s ambitious broiler farm construction project. Financial indicators reveal a positive Net Present Value, an Internal Rate of Return that exceeds the Weighted Average Cost of Capital (WACC), and a Payback Period of five years, aligning with the company’s strategic plans. These results underscore the financial viability and attractiveness of the proposed expansion.
Authors and Affiliations
Guritno Suro Amijoyo,
Keywords
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- EP ID EP725684
- DOI 10.47191/ijcsrr/V6-i12-88
- Views 47
- Downloads 0
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