Abstract
The economic analysis reveals the basic information on the expenditure and profit to an investor who is willing to invest on the production of basalt-based brake pad in Nigeria, Nigeria has huge demand of brake as revealed by data obtained from National Bureau of Statistics Abuja (NBS). The analysis was based on deductive economic analysis which assumptions were made and arrived at particular result and the costing was based on Activity-Based Costing (ABC) where overhead and indirect cost were assigned to the related product. The economic analysis will give an insight to an investor (s) who has been skeptic about investing in the manufacturing of brake pad in Nigeria. The analysis revealed that the total capital require for this investment is #54,520,184.00 to set up a manufacturing plant with a capacity of 12,960 pieces of brake pad per day with a depreciation period of ten years. It also showed that if the line will run at 75% efficiency, the annual production is 2,566,080 pieces of brake pads. The unit cost of production is #520.85, unit selling price is #572.935, interest before tax of #6,797,983.869, break-even quantity of 861,019pieces, payback period of eight months. The annual total cost of production is #1,373,924,104.00, annual total sales revenue of #1,470,309,952.00.Twenty-seven people are require for manning the plant.It is clear from above information the investment is worthwhile because of the good payback period and considering the huge demand in Nigeria.
Highlights
INTRODUCTIONThe essence of any research work is to impact positively on socioeconomic value of Nigeria, it is on this premise that the work sought to explore the economic viability of commercializing the production of basaltbased brake pad in Nigeria using Small and Medium Enterprises (SMEs)
The analysis revealed that the total capital require for this investment is #54,520,184.00 to set up a manufacturing plant with a capacity of 12,960 pieces of brake pad per day with a depreciation period of ten years
The essence of any research work is to impact positively on socioeconomic value of Nigeria, it is on this premise that the work sought to explore the economic viability of commercializing the production of basaltbased brake pad in Nigeria using Small and Medium Enterprises (SMEs)
Summary
The essence of any research work is to impact positively on socioeconomic value of Nigeria, it is on this premise that the work sought to explore the economic viability of commercializing the production of basaltbased brake pad in Nigeria using Small and Medium Enterprises (SMEs). The laboratory results of basalt-based brake pad have proven that the material is a good material for brake pad. There is need to explore the economic benefits of the material in commercial scale production most especially at this time when all the brake pad manufacturing industries are shut down in Nigeria because of high cost of imported raw materials and high instability of exchange rate. Economic Viability of Basalt-Based Brake Pad in Nigeria. Doi: Gai, Peter Friday, Adisa, Ademola Bello, Tokan Aje, and Bawa, Mohammed A. Manufacturing of automobile spares in developing economic like Nigeria will go a long way in meeting the demand of spare parts, improve the socio-economic status of country and create jobs for the teeming youth
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