A Feasibility Study on the Expansion of Production Capacity of CV XYZ

Authors

  • Fabian Aditya Susanto Sampoerna University

DOI:

https://doi.org/10.53748/jbms.v3i4.82

Keywords:

net present value, internal rate of return, profitability index, payback period

Abstract

Objective – This feasibility study aims to analyze whether or not this project will be profitable for the company and to understand what can the owner of the company expect regarding the return of this investment. Methodology – The study has employed a quantitative approach to evaluate the feasibility of expanding the handbag and backpack manufacturing company, CV XYZ. The specific techniques include NPV, IRR, profitability index, and payback period. Findings – The analysis shows that the project has a positive net present value at 15% discount rate, a 21% internal rate of return, and a profitability index of 1.29. This shows that the expansion should be implemented as it will be a profitable investment. Novelty –  The study essentially conducted a standard feasibility analysis for a business expansion project. While the specific context is a handbag and backpack manufacturing company, the methodology and analysis are typical for such projects.

 

Downloads

Download data is not yet available.

References

Baker, H. K., & Powell, G. (2005). Understanding Financial Management: A Practical Guide. Wiley-Blackwell.

Chen, M. T. (1998). Simplified project economic evaluation. Cost Engineering, 40(1), 31-36.

Clougherty, J., Duso, T., Seldeslachts, J., & Ciari, L. (2019). Transformational Strategies and Productivity Growth: A Transformational-Activities Perspective on Stagnation in the New-Normal Business Landscape. Journal of Management Studies, 57.

Laakso, T. (1997). Process Assessment Method — an approach for business process development. IFIP — The International Federation for Information Processing. Boston, MA.

Levinson, M. (2017). What is Manufacturing? Why Does the Definition Matter? Congressional Research Service. https://www.nist.gov

Matson, J. (2018). Cooperative Feasibility Study Guide: The Project Cycle. Forgotten Books.

Newnan, G. D., Eschenbach, T. G., & Lavelle, J. P. (2012). Engineering Economic Analysis (11th ed.). Oxford University Press.

Nimawat, D., & Shrivastava, A. (2016). Increasing Productivity through Automation. European Journal of Advances in Engineering and Technology, 3(2), 45-47 Retrieved from: https://ejaet.com

Downloads

Published

2023-11-30

How to Cite

Fabian Aditya Susanto. (2023). A Feasibility Study on the Expansion of Production Capacity of CV XYZ. Journal of Business, Management, and Social Studies, 3(4), 41–61. https://doi.org/10.53748/jbms.v3i4.82

Issue

Vol. 3 No. 4 (2023): Journal of Business, Management, and Social Studies

Section

Articles

License

Copyright (c) 2024 Journal of Business, Management, and Social Studies

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution 4.0 (CC 4.0) that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this journal.