CASH FLOW PROJECTION AND DISCOUNTED CASH FLOW ANALYSIS TO DETERMINE THE FINANCING STRATEGY OF APARTMENT PROJECT (CASE STUDY OF THE GRAND SOE-HATT APARTMENT PROJECT PLAN)

• Main Author: HAFIZH SETYADI 29115540, MOCHAMMAD
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/23104
• Institution: Institut Teknologi Bandung

This research would take a case on one of apartment project plan in Malang that will be developed by <br /> <br /> <br /> <br /> PT. Patra Prima Utama (PPU). With an assumption that all the apartment unit sales during the <br /> <br /> <br /> <br /> construction phase are using credit loan or called Kredit Pemilikan Apartemen (KPA), the cash flow <br /> <br /> <br /> <br /> that expected would be generated from an apartment project during construction is only down payment <br /> <br /> <br /> <br /> of the apartment sales. The amount of money earned from the down payment is certainly not enough to <br /> <br /> <br /> <br /> cover the total cost of building the apartment and this cost still added by the marketing fee that needs to <br /> <br /> <br /> <br /> be paid every time the apartment unit is sold. Lack of cash for construction payment will affect the <br /> <br /> <br /> <br /> completion time of the project. <br /> <br /> <br /> <br /> To cover the expected short of funds, there are two options: cover that short of funds by raising money <br /> <br /> <br /> <br /> from the investor or borrowing money from a bank. Both alternative need to be analyzed to determine <br /> <br /> <br /> <br /> the project’s financial feasibility under each financing alternatives. To estimate the feasibility of a <br /> <br /> <br /> <br /> project, the method taken in this research is by making a projected cash flow then analyze it using <br /> <br /> <br /> <br /> Discounted Cash Flow analysis. Those are the objectives that will be discussed in this research. <br /> <br /> <br /> <br /> From the cash flow projection, it’s predicted that there will be a shortage of fund at the first, second and <br /> <br /> <br /> <br /> third payment of the construction cost. In the final conclusion, the financing strategy that gives the best <br /> <br /> <br /> <br /> value for the company is using bank loan. Compared with the financing strategy by collaborating with <br /> <br /> <br /> <br /> the strategic investor, the bank loan alternative give the higher number of NPV, IRR and payback period. <br /> <br /> <br /> <br /> In the most likely scenario, the bank loan financing strategy generate NPV number of Rp. <br /> <br /> <br /> <br /> 45,002,323,934, IRR of 27.77% and payback period of 2.167 years. This financing strategy also gives <br /> <br /> <br /> <br /> benefit from the payment covering of construction cost, where some portion of the cost will be covered <br /> <br /> <br /> <br /> by bank loan and then repaid later when the construction is finished.