Assignment task: Apply the right method for solving problems in a project / business feasibility in an industrial company in a comprehensive manner.
In the last few years, the business of onion farmers is in great demand as an alternative business that promises profits. More and more people are choosing onion farming as a means of investment or a source of income, either as a side business or as a main income. The onion farmer business managed by Mr. Soleh is one of the shallot planting businesses that is used as the main income. The shallot planting business carried out by Mr. Soleh in Wulungsari village, Banjarnegara sub-district, where the business was initiated in 2005 or 17 years ago. For investors, the government, banks, and the onion farmers themselves, it is important to know whether the business is feasible or not to be developed or invest in onion farmers' businesses.
Therefore, it is necessary to conduct a feasibility study for this shallot farming with the aim of knowing the long-term prospects, losses and advantages of establishing a business. The methods used are market and marketing aspects, technical and production aspects, organizational and management aspects, and financial aspects. Based on the income generated during his time as a shallot farmer, Mr. Soleh has an initial capital of Rp. 17.500.000, - where the assumed profit is around Rp. 3,700,000, -/year.
By calculating the investment feasibility in the form of Payback Period (PP), Net Present Value (NPV) of 10%, Internal Rate of Return (IRR) between 6% and 7%, and Profitability Index (PI). The business establishment plan requires a feasibility study analysis to assess whether the project proposal can be accepted or rejected.
Question:
Q1. Mention the aspects of the Business Feasibility Analysis carried out in accordance with the case study above. Tell.
Q2. Explain from a financial aspect assuming an investment period of 3 years.
Q3. What do you think of the feasibility analysis on this business?