Decission Support System for Investment

TYPES OF BUSINESS

FEASIBILITY ANALYSIS METHOD

Feasibiliy analysis using Net Present Value (NPV) and Internal Rate of Return (IRR). Another criteria are Pay Back Period (PBP) and Break Even Point (Rupiahs dan Units).

1. Net Present Value (NPV)

Formulation :

Explanation :

PV = Present Value
F = Value on n-year
I = interest rate
n = year/ n-th period
(1 + i )-n = discount factor on n-th year

2. Internal Rate of Return (IRR)

Formulation :

3. Net Benefit Cost Ratio (Net B/C)

4. Break Even Point (BEP)

Formulation :

a. BEP (n) = Fix cost/ (Selling price - Variable cost per unit)
b. BEP (Rp) = n x selling price

or :

c. BEP (Rp) = Fix cost / (1-(Total of Variable Cost/Total sales)
d. BEP (n ) = Rp / total sales X total production

5. Pay Back Period (PBP)

Formulation : Latest year with negative cash flow + (absolut(current cash flow)/Cummulative cash flow)