ECONOMIC FEASIBILITY STUDY OF BIT.33 SPACE: A CO-WORKING SPACE IN BANDUNG

• Main Author: Adelia, Monika
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/49492
• Institution: Institut Teknologi Bandung

The working world changes quickly. New offices no longer look like offices but are open and transparent. These workplace solutions are commonly referred to as a co-working space. The rising group of work-at-home professionals, creative economic actors, and the rapid growth of startups in Indonesia show an increasing demand for the co-working space. But there is a problem faced by the owner of Bit.33 Space which is a co-working space located in Bandung. After running this business for one year, he felt less satisfied with the occupancy rate of his building which was used as a co-working space. To find out if this project is feasible, the author wants to help the owner to assess the economic feasibility study by testing several parameters such as Net Present Value (NPV) to consider the time value of money, the Internal Rate of Return (IRR) to measure the discount rate of the investment, the Payback Period to evaluate the potential investment for the length of the return on capital and Profitability Index (PI). Lastly, analyzing the sensitivity analysis to check the NPV, IRR, payback period, and the profitability index after the parameter is evaluated. This sensitivity analysis will test the change of annual revenue of the business because this variable has a significant impact and causes uncertainty of the feasibility results. The conclusion of the Bit.33 Space project is feasible to do because the result of Net Present Value is Rp 741,369,840 which is greater than 0, Internal Rate of Return is 28.41% which is greater than WACC (16.59%), Payback Period for 5 years and 9 months, and Profitability Index is 1.58 which is greater than 1. For sensitivity analysis results with optimistic conditions, when the annual revenue increased by 20%, the result shows the NPV is greater than 0, IRR greater than the WACC, the payback period is 3 years 8 months, and the last is the profitability index result is greater than 1. But for pessimistic condition this project is not feasible because the NPV result is below than the 0, IRR is under the WACC’s project, the payback period needs longer time than the period of this project, and the profitability is below than 1.