Internal Rate Of Return Research Articles

Analisis Studi Kelayakan Usaha Briket Limbah Tongkol Jagung

The use of energy resources that are not environmentally friendly is a problem in Indonesia today. Briquettes are also the primary material because they are abundant, and the primary material has yet to be optimally utilized, including corn cobs. The purpose of this study is to analyze the economic feasibility of corn cob waste briquettes in this study using data analysis of technological technical aspects, financial feasibility analysis such as Payback Period (PP), Net Present Value (NPV), Internal Rate of Return (IRR) and Benefit and Cost Ratio (B/C). The results showed that it takes 19,800 kg of corn cobs to produce charcoal, as much as 3,168 kg and 158.4 kg with tapioca starch adhesive material, as much as 5% of the total weight of charcoal powder, requiring four pieces of equipment, namely pyrolyzer machines, Hammer mills, Planetary mixers, and Tray dryers. Furthermore, the feasibility analysis of this corn cob briquette business was declared feasible with the four categories: Payback Period (PP) for 3.1319 years, Net Present Value (NPV) of Rp 28,129,336,212; IRR of 17.77%, and Net B/C of 1.55. The corn cob briquette agro-industry will remain profitable even if the production capacity decreases by 28% from the original capacity. The agro-industry can also still operate despite an 8% decrease in the selling price of briquettes and will remain profitable if raw materials increase by 17%.

Techno-economic assessment of swine manure biochar production in large-scale piggeries in China

Biochar production using swine manure (SM) from large-scale piggeries is increasingly needed. However, little is known about the economic feasibility for SM biochar production. Herein, SM biochar production was simulated via Aspen Plus, and techno-economic model was applied to calculate the net present value (NPV), internal rate of return (IRR), and discounted payback period (DPP) for SM biochar production with a processing capacity of 8000 tons SM per year. Results suggest that this project is susceptible to biochar selling price and operation cost. When the biochar price is > 116 USD/ton, the NPV is positive. When the biochar selling price is increased from 154 to 193 USD/ton, the IRR is increased from 11 % to 41 %. The DPP analyses show that the investment payback period for this project is 4.6 years. Moreover, compared to conventional SM treatment routes, valorization of SM into biochar in large-scale piggery in China has a shorter investment period. Finally, this study suggests that swine manure biochar production in large-scale piggeries in China is profitable, deserving investment.

Production of sweet potato distilled beverage: Economic evaluation via enzymatic and acid hydrolysis

AbstractThis study aimed to assess the feasibility of utilizing sweet potato waste for distilled beverage production in two process scenarios: (i) acid hydrolysis and (ii) enzymatic hydrolysis. Laboratory experiments were conducted using in natura sweet potato waste and the data obtained were used to design a production system capable of producing 1000 L of distillate per day. Net present value (NPV), internal rate of return (IRR), and discounted payback indicators were used for economic analysis, with a minimum attractiveness rate (MARR) of 15%. The initial investment for the projects was BRL 1 139 610.86 (USD 223 146.80) for enzymatic hydrolysis and BRL 1 314 824.54 (USD 257 455.36) for acid hydrolysis. Packaging costs were identified as the greatest expenses in the process. Assuming a selling price of BRL 14.50 (USD 2.84), the enzymatic hydrolysis process demonstrated an NPV of BRL 4 792 520.77 (USD 938 421.92) and IRR of 83.39%, and the acid hydrolysis process showed an NPV of BRL 2 191 636.78 (USD 429 143.68) and IRR of 42.49%. Consequently, establishing a production plant for distilled beverages proved to be more economically attractive when employing the enzymatic hydrolysis process and fermentation simultaneously, resulting in a return on investment within 1.46 years of operation. Upon scrutinizing the gain matrix, it became apparent that critical factors with the potential to affect the project's feasibility detrimentally, if increased, included the cost of acquiring packaging, the final volumetric fraction of the distilled beverage, and the tax rate. Nevertheless, an upturn in the selling price of the beverage and a process improvement yield both have the potential to underpin the project effectively.

Improving dairy manure hydrolysis and acidification through microbial community restructuring by adaptation to hyperthermophilic conditions

Dairy manure (DM) contributes significantly to greenhouse gas emissions and ecosystem degradation, yet its resistance to biodegradation hinders widespread bioprocessing applications. Lignocellulosic materials in DM pose a particular challenge because of their recalcitrance. Bioprocessing under hyperthermophilic (≥70 °C) conditions potentially offers an advantage over traditional fermentation temperatures due to enhanced activity of enzymes and the kinetics of enzymatic reactions. This can lead to a higher conversion rate and a greater extent of biomass hydrolysis and acidification. To test the validity of this hypothesis, the current study evaluated the efficacy of anaerobic hydrolysis and acidogenic fermentation of DM under mesophilic, thermophilic, and hyperthermophilic conditions. All inocula were adapted to corresponding temperatures but were derived from the same mesophilic source. Hyperthermophilic conditions resulted in superior DM hydrolysis efficiency (53%) compared to mesophilic (34%) and thermophilic (42%) conditions. The hyperthermophilic environment was particularly favorable to the decomposition of crude proteins and hemicellulose, which were reduced by 64% and 54%, respectively. Furthermore, hyperthermophilic fermentation also yielded the highest volatile fatty acid (VFA) production rate of 460 mg/L/day during the first four days, representing improvements of 50% and 90% over mesophilic and thermophilic conditions. In part, this was attributed to the enhanced production of branched-chain VFAs, including an increase of 6–10% in isobutyric acid and 12–13% in isovaleric acid. At hyperthermophilic conditions, however, there was no accumulation of VFAs during the days 5–8 of fermentation, which could be due to acetate conversion by the syntrophic acetate-oxidizing bacteria. A considerable gain in hydrolysis efficiency and VFA production rate were accompanied by a reduction in microbial diversity, which suggests that hyperthermophilic temperature is a favorable environment for the selection of organisms with enhanced DM hydrolysis and fermentation capabilities. A significantly increased relative abundance of xylanolytic Caldicoprobacter (23% of population) and proteolytic Thermovirga (9% of population) could be the major contributors to improved decomposition of hemicellulose and protein. As revealed by the techno-economic analysis, acidogenic fermentation of DM at 70 °C and a retention period of 4 days provides the greatest positive net present value, highest internal rate of return of 9.2%, and shortest investment payback period of 9 years. This study demonstrates that hyperthermophilic conditions enable superior deconstruction and bioconversion of lignocellulose-containing biomass into VFAs under reduced retention times, offering a promising approach for improving DM management and generating bioproducts.

Unlocking the techno-economic potential of biomass gasification for power generation: Comparative analysis across diverse plant capacities

This research aims to evaluate the techno-economic viability and commercial potential of biomass gasification across different capacities. Sensitivity analysis was conducted based on an established downdraft gasifier model using Aspen Plus. Results underscored the significant impact of gasification temperature and equivalence ratio (ER) on syngas composition, low heating value (LHV), and cold gas efficiency (CGE). Among the feedstocks tested, coconut shell emerged as a feasible feedstock, yielding syngas with an LHV of 8.93 MJ/Nm3 and achieving a CGE of up to 71.12 %. Optimal gasification temperatures ranged between 750 °C to 1,000 °C, with peak ER falling within 0.1 to 0.3. Economic analysis revealed that smaller-scale operations like Plant A resulted in a negative net present value of − US$0.63 million, indicating unfavorable investments. The internal rate of return notably increased from 9.53 % for Plant B compared to −2.56 % for Plant A (20 kW). Plant D, with larger capacity of 20 MW, showed an impressive payback period of less than two years (1.69 years). Medium to large-scale plants such as Plant C (2 MW) and Plant D demonstrated greater economic resilience, with Plant D achieving a significantly lower levelized cost of electricity of US$ 0.19/kWh compared to Plant A at US$ 0.86/kWh. It was noted that the impact of capital costs, operating expenses, and revenue variations is less pronounced at larger scales. The findings from this study shed light on the feasibility of biomass gasification for power generation as a viable option, thereby unlocking the potential for its large-scale commercialization.

The circular bioeconomy of the olive oil industry: Deterministic and probabilistic profitability of olive mill by-product gasification

In the novel paradigm of the circular economy the value of products, materials, and resources is retained in the economy for as long as possible, thereby minimizing waste generation. In this context, the olive oil producing countries are presented with a new opportunity that lies in the large amount of by-products generated by the olive oil industry, in particular olive pomace. Among the existing options for valorizing it, gasification is a technically proven and economically viable process, especially for moderately high energy prices. This research aims to analyze the profitability of olive pomace gasification, identifying the main uncertainty factors that determine said profitability. To that end, sensitivity analyses and probabilistic scenario analyses using the Monte Carlo method are conducted for the first time in this research context. The results show a positive profit margin of €19.27 per ton of milled olives, a Net Present Value (NPV) of €453,067, and an Internal Rate of Return (IRR) of 9.7 %. The sensitivity analysis indicates that the electricity price is the main determinant of profitability, while other factors, such as the biomass price or the sale of by-products (biochar), are less important. The Monte Carlo analysis reveals the uncertainty involved in these types of projects, showing that the probability of the investment being profitable (NPV>0) is only 25.1 %. The assessment evidences that this kind of projects presents high capital needs and strongly uncertain profitability, recommending the implementation of public and private green finance instruments to overcome high-capital barriers and de-risk these investments.

Assessment of Colombian renewable energy auctions policy: Enabler or barrier for concentrating solar power plants

Auctions are an alternative for introducing renewable energy (RE) projects into electricity markets at competitive prices. Colombia added 2.2 GW capacity of RE through this mechanism. Nevertheless, 94% of the awarded generation is allocated between 12 a.m. and 5 p.m. because of a lack of low-cost storage. Integrating concentrating solar power plants (CSP) could be relevant in tackling this issue. Therefore, a preliminary step is to determine if Colombian instruments benefit the deployment of CSP and trigger the discussion about its future in the country. In this work, we evaluate how auction mechanisms and fiscal incentives (FI) influence the Levelized Cost of Electricity (LCOE) and Internal Rate of Return (IRR) for two CSP configurations. The results indicate that FIs reduce capital expenditures between 17.11% and 19.45%, reaching similar LCOEs to those reported internationally. However, energy prices higher than USD 150/MWh are required to achieve an adequate IRR. Regarding the auction design, it is observed that a “security criterion” leads to a significant loss of competitiveness for CSP as it neglects its possibility to support demand at night. Policy suggestions are provided for a level playing field where low-cost solutions can coexist with dispatchable renewable power generation.

Optimizing the bidding strategy and assessing profitability of over-install renewable plants equipped with battery energy storage systems

The over-installation of renewable energy sources (RES) can enhance the profits of RES producers by increasing the total exporting energy; however, RES power curtailments must be applied under over-production of RES plants to ensure their contracted maximum export capacity limits. Battery energy storage systems (BESSs) can be used to reduce the RES curtailments and therefore enhance the profits of producers. This work develops a bidding strategy as a scenario-based stochastic optimization scheme to maximize the expected profits of producers in electricity markets considering battery degradation and maximum export capacity constraints. Using the proposed scheme, a financial analysis is performed to assess the profitability for over-installing hybrid RES plants by calculating the net present value and internal rate of return of the project under different BESS costs. Simulation results, using real data from a wind and photovoltaic plant, demonstrate the effectiveness of the proposed stochastic scheme in enhancing the profit of producers compared to the corresponding deterministic scheme. The performed financial analysis, using the net present value metric, indicates that a maximum over-installation of 150%–170% and 160%–180% for the wind and photovoltaic plant, respectively, is profitable, while the usage of a BESS is profitable when its cost is under 200,000 €/MWh.

Optimization of Weibull Distribution Parameters with Application to Short-Term Risk Assessment and Strategic Investment Decision-Making

Accurate parameter estimation is fundamental in financial modeling, especially in investment analysis, where the Modified Internal Rate of Return (MIRR) plays a key role in evaluating investment performance. This study aims to enhance risk and return predictions in Sharia-compliant property investments by exploring the efficacy of various optimization techniques for estimating Weibull distribution parameters within the MIRR framework. To achieve this, we employed a comparative analysis of optimization methods, including Simulated Annealing (SA), Differential Evolution (DE), Genetic Algorithm (GA), and traditional Numerical Methods (NM). Performance was assessed through metrics such as Root Mean Squared Error (RMSE), Akaike Information Criterion (AIC), R-squared (R2) values, and Kolmogorov-Smirnov (KS) statistics. The results reveal that metaheuristic algorithms (SA, DE, GA) significantly outperform traditional numerical methods in terms of parameter estimation accuracy. Specifically, SA achieved the lowest RMSE of 0.042, with a Weibull shape parameter estimate of 1.254 and variance of 0.004, followed closely by DE with an RMSE of 0.048, and GA with 0.046. In contrast, NM exhibited a higher RMSE of 0.067, with a shape parameter estimate of 1.310 and a variance of 0.006. The AIC values for metaheuristic methods ranged from 14.25 to 14.68, compared to 15.12 for NM, and R2 values for metaheuristic methods ranged from 0.932 to 0.945, compared to 0.910 for NM. KS statistics further underscored the superior model fit of metaheuristics, with SA showing the lowest KS value of 0.045. The study underscores the critical role of metaheuristic optimization in improving the accuracy of parameter estimation based on MIRR models. This enhancement provides more reliable risk assessments and returns predictions, offering valuable insights for informed investment decision-making and contributing to optimized financial outcomes in the property sector.

Designing with building-integrated photovoltaics (BIPV): A pathway to decarbonize residential buildings

The ambitious targets set for greenhouse gas emissions and energy efficiency by 2050 demand a critical increase of building renovation rates. This challenge is shared by most Western nations, including Europe and Switzerland, where the current annual renovation rate stands at a mere 0.6 %. In this context, designing renovation strategies using building integrated photovoltaic (BIPV) components as a new building material is one of the most promising ways to achieve decarbonization of the building stock in an economical and environmentally efficient manner. To this end, building design teams are key, especially in promoting BIPV-based projects to their clients and taking this approach into account from the initial design phase where pivotal decisions with significant impact are made. This article illustrates the potential impact of specific choices in renovation processes on the overall building performance, considering a Life-Cycle Analysis/Cost (LCA/LCC) and multi-criteria analysis. It uses a 1970's residential building as case study, examining different refurbishment scenarios. Findings reveal that scenarios integrating BIPV can significantly enhance energy savings, achieving up to 122 % in energy efficiency gains, and can meet the 2050 targets for cumulative energy demand (CED) and global warming potential (GWP). Additionally, the most effective BIPV scenarios demonstrate economic viability with a payback period of 14–18 years and internal rates of return (IRR) between 5.3 % and 5.9 %. These results underscore the economic and environmental benefits of BIPV in building renovations and advocate for its broader adoption to achieve national and international climate goals.

Bioeconomic simulator for economic-financial calculations for the management support of tilapia reproduction fish farms

Owing to the importance gained by the Nile tilapia (Oreochromis niloticus) in recent years, it is necessary to use tools for the control and management of finishing fish farms. The work was conducted with the objective of developing a bioeconomic simulator to assist finishing fish farms and support the management decisions taken. One tool was developed through the combination of spreadsheets that align the centers of technical and economic control, making it possible to obtain economic and financial results by filling in data (inputs), which is real or can be simulated. The spreadsheets are interconnected, and after the data are inserted, the results are automatically generated. Data from its performance indicators and technicians were used for the creation of four scenarios: Monophase x Nursery (MonoN), Monophase x Cage (MonoC), Multiphase x Nursery (MultiN), and Multiphase x Cage (MultiC). The MultiC system had the highest revenue (US$288,996.16) and net income (US$72,563.52), resulting in a better use of resources, with high density, reaching productivity of 283.41 kg/m³. In the financial evaluation, all systems were acceptable to investors, with MultiC presenting the best results, with an Internal Rate of Return of 20.41% and a six-year payback. The simulator was able to carry out the calculations and present results close to those found in the finishing fish farms, being able to be used with other combinations of data aimed at assisting producers and researchers.

Techno-economic assessment of bio-compressed natural gas as a transport fuel for South African Provinces

South Africa's transport sector is a major contributor to carbon emissions due to its reliance on liquid fossil fuels such as diesel and petrol. In a bid to decarbonize the transport sector, South African government is committed to developing its green economy through the use of clean and renewable energy sources. Biogas, as a renewable energy source, can be derived from food waste (FW); upgraded to bio-compressed natural gas (bio-CNG) and applied as a vehicle fuel. This study assesses the economic feasibility of upgrading biogas to bio-CNG as a transportation fuel in South African provinces. The FW generation was determined using a mixture of population and income models while the biogas generation is modelled using modified Bushwell's equation. The economic analysis was premised on four economic metrics such as net present value (NPV), payback period (PBP), internal rate of return (IRR), and levelized cost of bio-CNG (LCO-bio-CNG). Some important findings indicate that an average of 6.6717 million tons/year of FW is generated in South African provinces producing 11.7111 million Nm3 of bio-CNG which is capable of filling about 1.2 million 10 m3 compressed gas cylinders. Economically, the project is profitable with positive NPV in all provinces, less than 2 years PBP, minimal LCO-bio-CNG (0.0551–0.0807 USD/m3) as well as remarkable IRR (31.15–36.08 %). Sensitivity analysis was also conducted to determine the influence of some critical parameters on the general performance of the project. This study provides valuable information for optimal investment in bio-CNG for public transportation.

Green hydrogen and wind synergy: Assessing economic benefits and optimal operational strategies

Volatile electricity prices have raised concerns about the economic feasibility of wind projects in Finland. This study assesses the economic viability and optimal operational strategies for integrating wind-powered green hydrogen production systems. Utilizing modeling and optimization, this research evaluates various wind farms in Western Finland over electricity market scenarios from 2019 to 2022, with forecasts extending to 2030. Key economic metrics considered include internal rate of return, future value, net present value (NPV), and the levelized cost of hydrogen (LCOH). Results indicate that integration of hydrogen production with wind farms shows economic benefits over standalone wind projects, potentially reducing LCOH to €2.0/kgH2 by 2030 in regular and low electricity price scenarios, and to as low as €0.6/kgH2 in high-price scenarios. The wind farm with the highest capacity factor achieves 47% reductions in LCOH and 22% increases in NPV, underscoring the importance of strategic site selection and operational flexibility.

Analisis Kelayakan Investasi Proyek Pembangunan Asvara Resort Manuaba Ubud

The current property competition in Bali, marked by an increase in the construction of hotels, villas, and resorts, coupled with the fluctuating growth rate of tourist visits over the past five years due to the pandemic (with both increases and decreases), necessitates a reevaluation of the investment feasibility analysis for the construction of Asvara Resort Manuaba Ubud. This study aims to assess the market, technical, and financial feasibility aspects of the investment in the construction of Asvara Resort Manuaba Ubud, to determine whether this development remains profitable for investors. Additionally, it seeks to ensure that the benefits of this resort development can be felt by the government and the surrounding community, thus supporting the welfare and economy of the region, especially Gianyar Regency. To analyze the market aspect, data on the number of tourists visiting Bali, occupancy rates, and the availability of similar resorts in the surrounding area, obtained from government agencies and several star-rated hotels in the vicinity, are required and then processed using forecasting methods. For the technical aspect analysis, geographical location data, project location, and land utilization plans are analyzed using qualitative descriptive methods. For the financial aspect analysis, data on costs and revenues obtained from contractors and operators are analyzed using Net Present Value (NPV), Benefit Cost Ratio (BCR), Payback Period (PP), and Internal Rate of Return (IRR) parameters. The market aspect analysis results show an increase in tourist visits, including occupancy rates, which will positively impact visits to this resort. From the technical aspect, land utilization and allocation have been optimized for investment. Financially, the NPV value is Rp 16,706,385,995.27, the IRR is 19.67%, the BCR is 1.242, and the PP is 10 years. The sensitivity analysis results, considering the worst-case scenario where all revenue components decrease by 8% and costs increase by 8%, show an NPV value of Rp 1,215,020,196.08, an IRR of 17.13%, a BCR of 1.018, and a PP of 13 years. Overall, it can be concluded that this investment is feasible for investors.

The sensitivity of agricultural biogas plants to changes in energy prices in Poland

In Poland, despite ambitious plans from 15 years ago, when it was assumed that by 2020, an agricultural biogas plant would be standard in every commune, the potential of agricultural biogas has not been used due to the lack of stable legal regulations and financing programmes for the construction of the plants. The situation has now changed due to new forms of support systems, which motivated the authors to compare two agricultural biogas plants operating in the certificate system and the support system in the form of feed-in premiums. Moreover, the authors pointed to differences in the number of agricultural biogas plants and their capacity by voivodeship due to changes in legal conditions in force in two periods: from 1 January 2011, to 30 June 2016, and from 1 July 2016, to 19 January 2024. Based on the research methods used ‒ including Earnings Before Interest, Taxes Depreciation and Amortisation, the Internal Rate of Return, risk matrix and data analysis in spatial terms ‒ it was indicated that: 1. agricultural biogas plants are characterised by very high sensitivity related to the probability of risk in the case of investment costs, substrate prices and changes in energy prices; 2. financial support is important at the stage of construction of a biogas plant, which largely makes it possible to shorten the payback period and thus increase the willingness of future investors to invest in biogas plants and 3. in the periods analysed, significant differences were noted in the spatial location of biogas plants due to trends towards lower-power biogas plants, which is probably dictated by the constant and predictable premium system in the new support system.

Ethane integration project—a study for Egyptian NGLs plants and their economics

For Egypt, ethane is a vital chemical precursor, with the potential to significantly attract financial resources and drive economic growth. Enhancing its added value necessitates efficient recovery of ethane before it enters the national grid without processing. This research investigates the technical and economic feasibility of integrating natural gas liquids (NGLs) from three Egyptian NGLs plants—South Western Desert NGLs (SWD NGLs), North Western Desert NGLs (NWD NGLs), and East Mediterranean NGLs (EMD NGLs)—to improve ethane recovery from natural gas fields. The study focuses on revamping these NGLs plants using various NGLs recovery techniques, conducting a comprehensive comparison to identify the most effective methods for processing rich feed gas. Detailed design of the NGLs recovery processes was developed using HYSYS V.14 simulation software and supplementary calculation sheets. The design criteria encompass both technical and economic parameters to ensure a holistic approach in meeting project requirements. Results indicate a significant increase in ethane recovery: 16% for SWD NGLs, 10% for NWD NGLs (A, B, C), and 85% for EMD NGLs. This improvement will boost ethane feedstock for petrochemical companies from 2000 ton/day to 3500 ton/day, enabling increased polyethylene production. Economic analysis for the base case shows an expected internal rate of return (IRR) of 26%, a net present value (NPV) of USD 73 million, and a payback period of approximately 3 years. Sensitivity analysis on product prices, feed gas prices, and total capital investment confirms the project’s economic viability, with all cases showing feasibility (IRR ≥ 15%) except when product prices fall below USD 225/ton for propane, USD 215/ton for liquefied petroleum gas (LPG), and USD 25/bbl for condensate. This study highlights the potential for enhanced ethane recovery, offering substantial economic benefits and supporting the growth of Egypt’s petrochemical industry.

ANALISIS KELAYAKAN INVESTASI PROYEK PENGADAAN ALAT PENGEMBANGAN CHAMBER BALAI UJI DENGAN MENGGUNAKAN NET PRESENT VALUE, INTERNAL RATE RETURN DAN PAYBACK PERIOD DI PT DEF

PT DEF is one of the electronic equipment calibration checking companies in Depok, West Java. PT DEF carries out various checks in the activity chamber to support the successful entry of electronic equipment into Indonesia. The Anechoic Chamber is a chamber designed to absorb electromagnetic waves or sound so that environmental conditions outside the room will not affect the conditions inside the chamber. The Anechoic Chamber. An anechoic chamber is a chamber designed to minimize the reflection of sound waves. This space is lined with thick sound-absorbing material to prevent sound waves from bouncing off the walls, ceiling and floor. This allows accurate measurement of the acoustic characteristics of an object or sound. Anechoic chambers are used in various applications Acoustic research Anechoic chambers are used to research acoustic phenomena, such as sound wave propagation and diffraction. Investment. The anechoic chamber calculation uses Net Present Value (NVP), Internal rate of return (IRR), and Payback Period (PBP). The feasibility of investing in a project to procure test center chamber development equipment can be determined based on the calculation of Net Present Value, Internal Rate of Return and Payback Period. . Based on the results of the NPV calculation, the results obtained were IDR 1,030,241,369,221. So, this investment project can be accepted. Based on the IRR calculation results, the result was 14.803%, meaning that the company's rate of return was greater than the interest rate that the company had to bear. This shows that in the 10th period the company will be able to provide profit results at the level of 14.803%, which is the cutting level. Therefore, the results of this analysis provide investment decisions that are worth implementing. Based on the calculation of the payback period, the Payback Period is less than the maximum amount (10) that can be accepted by the Payback Period, the project can be accepted and continued. In other words, more or less the return on capital from this investment is 8 months

Financial Feasibility of Service-Based Business

In Indonesia, over 6,300,000 toddlers are affected by stunting. Research indicates that the prevalence of stunting among children of working mothers is 30.6%. Despite the associated health risks, many working mothers prefer formula milk as a substitute for breast milk. Mengasihi, a health technology start-up providing breast milk powdering services for personal use, aims to offer babies a simple and effective nutritional solution. This study investigates the financial feasibility of Mengasihi as an early-stage start-up. It was found that cash flow plays a crucial role in start-up failure, impacting long-term organizational success. A feasibility study assessed Mengasihi's financial viability, analyzing internal and external financial conditions using criteria such as Payback Period, Net Present Value (NPV), and Internal Rate of Return (IRR) based on five-year financial projections. The results indicate that the Mengasihi project is financially viable, and an implementation plan was provided as part of the study.

Financial Feasibility of A Hair Care-Based Business

Hair loss, or alopecia, is a global concern, with 3.8% of Southeast Asia's population affected by Alopecia Areata, an autoimmune disorder. Traditional treatments like minoxidil and finasteride, while effective, often have side effects. To address this, Sassle, a haircare startup, developed an almond-based hair serum in collaboration with ITB's School of Pharmacy, offering a natural solution without adverse effects. Sassle has completed product development and is preparing to launch its go-to-market strategy. This study evaluates the financial feasibility of Sassle's product using primary data from Sassle's records and secondary data from industry comparables. Key financial metrics such as the Payback Period, Net Present Value (NPV), and Internal Rate of Return (IRR) were analyzed, along with a scenario analysis under pessimistic, base, and optimistic conditions. The base scenario indicated a payback period of 3 years and five months, a positive NPV of Rp381,007,156, and an IRR of 49%, surpassing the Weighted Average Cost of Capital (WACC) of 5.02%. In the pessimistic scenario, with a 25% sales reduction, the payback period was four years and 11 months, with a positive NPV of Rp265,828,152 and an IRR of 32%. With a 15% sales increase, the optimistic scenario predicted a 2-year, 1-month payback period, a positive NPV of Rp622,915,633, and an IRR of 67%. The findings confirm that Sassle's business model is financially viable and capable of substantial returns, providing critical insights for strategic decisions in investment, market expansion, and operational scaling.

Economic evaluation of the “Healthy Water for La Laguna” project

Objective: To identify the costs and benefits attributable to the “Healthy Water for La Laguna” project, quantifying and evaluating them throughout their useful life, with the aim of judging the convenience of conducting this project. Design/methodology/approach: An Economic-Financial Evaluation was conducted determining the main economic indicators: Internal Rate of Return (IRR), Net Present Value (NPV), and Cost-Benefit Rate (C/B R). Results: The project “Healthy Water for La Laguna” was profitable given the following indicators: Social Net Present Value of $26´819,451,175 in a horizon of evaluation of 34 years considering a discount rate of 10%, an Internal Rate of Return (IRR) of 35.29%, and a Benefit-Cost Rate of 2.8. In the sensitivity analysis, it was determined that the project shows a low sensitivity to the increase in investment and operation costs. However, it was seen that the variable that could have the most significant impact is that of benefits, since a reduction of more than 64.33% would make the Net Present Value (NPV) lower than zero. Limitations on study/implications: The one limitation found in the study was the lack of information, since some missing data had to be estimated. Findings/conclusions: It can be concluded that the execution of the project is essential and necessary to achieve an immediate increase in the consumption of drinking water in the locations covered by the project, in addition to serving as a departure point to improve the quality of the water used and to reduce the impacts of overexploitation.