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Investment in Order to Increase the Production Capacity to Support the Sale Growth and the Marketing

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In order to justify the new investment to support the sale growth of paper core, an analysis needs to be done on the capital budgeting, production capacity, SWOT on existing company so that a marketing plan can be set up.nnFor this expansion project the NPV is 951.68 million rupiah, payback period is 2.97 years and IRR is 31.7%. The new rate capacity gives a result of increased capacity to 57% (950 hours/month) equal to 4,525 tons/ year.nnSWOT analysis shows the company strength in having an experience team in production, engineering, and marketing. The weakness is that the lab equipment is not complete and the product line is only one. The opportunity is to grow the sale and the threat if the company does not continue innovatively to develop a new product.nnThe marketing plan is to increase the sale volume 3,480 tons in year 2005 which represents 20.8% increased from previous year and reaches maximum 4,080 tons at 41.7% in year 2007. n nnThe sales revenue is targeted 14 billion rupiah in year 2005 and reaches to the highest sales value of 19.5 billion rupiah with the operating profit of 2.9 billion rupiah in year 2009. This represents of 356% in operating profit gained from year 2004 through the standard and new product line.nnBase on the above research figures it is recommended to accept the investment project.nn

nNotes: CD is not available

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Availability

M00061

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Available

Detail Information

Series Title

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Call Number

61

Publisher

: Swiss German University., 2004

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Language

English

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Subject(s)

MBA

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