INVESTMENT VALUATION OF TUGBOAT AND BARGE USING CAPITAL BUDGETING AND FREIGHT RATE SENSITIVITY ANALYSIS (CASE STUDY: PT ANGKUT)

• Main Author: YUVITA (NIM 29316309), ALMIRA
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/25403
• Institution: Institut Teknologi Bandung

<p align="justify">Coal continues to be key energy source of power generation and also is primary fuel for cement and steel production. Indonesia is engaged in aggressive infrastructure, specifically manufacture of power plant as the country is having a project of 35 GW. This program aims at increasing power capacity and therefore becomes highly dependent on the coal supply and its logistic to arrive in place. This situation is a lucrative opportunity for PT Angkut whose core activity is to provide coal transportation. The key domestic customer of PT Angkut is PT PLN, a government-owned corporation that generates and distributes most of electrical power for the nation. In favor of increasing the tugboat and barge efficiency, the business intends to make an investment in an additional tugboat and barge. <br /> <br /> <br /> Considering that the tugboat and barge investment is a significant step, its financial calculation is critical and therefore a technique so called capital budgeting is required. The objective of this study is to evaluate and determine if the investment is worth pursuing or not. <br /> <br /> <br /> The methodolgy of the feasibility study involves several measures i.e. Net Present Value (NPV), Internal Rate of Return (IRR), Discounted Payback Period (DPB) and Profitability Index (PI) in addition to construction of forecast on financial statements i.e income statement and cashflow. Furthermore, sensitivity analysis on freight rate and Monte Carlo simulation is used to determine the probability of positive and negative NPV to occur. In addition, in performing the analysis, environmental factor ought to be assessed with the use of PESTEL analysis. <br /> <br /> <br /> The study result shows that the investment is feasible, given a base scenario under assumptions made by the firm’s management. Included in the assumption of the base scenario, the investment cost is Rp 30,000,000,000 and annual sale growth rate is 7%, maximum capacity is 7,500 ton and useful lifetime is 10 years that is planned to commence in 2019. Moreover, the sensitivity analysis suggests that the minimum freight rate the business can charge to its customers is Rp 35,000/ton. Furthermore, Monte Carlo simulation results in 95.52% chance of positive NPV and 4.48% chance of negative NPV to occur. <p align="justify">