FINANCIAL FEASIBILITY STUDY OF MIX-USE BUILDING AREA INVESTMENT PLAN
PUTRI, NURUL SANDY
MetadataShow full item record
PT XYZ owns a plot of land located in one of big cities in West Java Province and wants to maximize the utilization of the land. They proposes a business agreement to PT ABC to develop it into an area consisting of several buildings with different functions (mix-use building area). The area is planned to have 9 businesses; hotel, convention center, apartment, sport center, school, co-working space, parking building, and theme park. The cooperation or business agreement between PT XYZ and PT ABC is business cooperation with a 30 years consortium time. This research is intended to conduct a financial feasibility analysis of investment plan of this mix-use building area as consideration to ABC as the prospective investor of this investment. The feasibility of an investment plan can be financially analyzed by using Discounted Cash Flow (DCF) method. In order to reduce uncertainty from the calculation, the financial projection is performed by using 3 scenarios; moderate, pessimistic, and optimistic. From the results of financial projections, the development of mix-use building area required Rp 957 Billion. In term of business cooperation, ABC need to pay a compensation fee as much as Rp 555 Billion within first 10 years of the consortium time. With WACC 11.51%, by using the basic assumption (moderate scenario) the NPV of this investment is Rp 335.5 Billion, IRR 17.54%, and 17 years of payback period. From the sensitivity analysis, there are 4 variables that greatly affect the NPV and IRR, which are total investment cost (capital expenditure), hotel operating cost, theme park operating cost, and total compensation fee.