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    PP80TPD P1

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    Zaki Adan
    Pascorp Papers Bhd is proposing a 80 tonnes per day waste reduction project with an internal rate of return of 15.4% and equity internal rate of return of 32.87%. The capital expenditure is RM158 million and operating costs are RM16 million per year. The project is expected to generate RM30 million in operating profit annually. Equity will be 10% of the project cost and debt financing will make up the remaining 90%. The breakeven production level is very close to the maximum production level of 21.5 million litres per year, leaving little buffer.

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    PP80TPD P1

    Uploaded by

    Zaki Adan
    9 views1 page
    Pascorp Papers Bhd is proposing a 80 tonnes per day waste reduction project with an internal rate of return of 15.4% and equity internal rate of return of 32.87%. The capital expenditure is RM158 million and operating costs are RM16 million per year. The project is expected to generate RM30 million in operating profit annually. Equity will be 10% of the project cost and debt financing will make up the remaining 90%. The breakeven production level is very close to the maximum production level of 21.5 million litres per year, leaving little buffer.

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    Pascorp Papers Bhd is proposing a 80 tonnes per day waste reduction project with an internal rate of return of 15.4% and equity internal rate of return of 32.87%. The capital expenditure is RM158 million and operating costs are RM16 million per year. The project is expected to generate RM30 million in operating profit annually. Equity will be 10% of the project cost and debt financing will make up the remaining 90%. The breakeven production level is very close to the maximum production level of 21.5 million litres per year, leaving little buffer.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
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    9 views1 page

    PP80TPD P1

    Uploaded by

    Zaki Adan
    Pascorp Papers Bhd is proposing a 80 tonnes per day waste reduction project with an internal rate of return of 15.4% and equity internal rate of return of 32.87%. The capital expenditure is RM158 million and operating costs are RM16 million per year. The project is expected to generate RM30 million in operating profit annually. Equity will be 10% of the project cost and debt financing will make up the remaining 90%. The breakeven production level is very close to the maximum production level of 21.5 million litres per year, leaving little buffer.

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    © All Rights Reserved
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    of 1

    Pascorp Papers Bhd

    Waste Reduction Project (80 TPD)


    DASHBOARD

    PROJECT IRR 15.40%


    EQUITY IRR 32.87%

    Project
    ITEM % +/- RM
    Capital Expenditure 0% 158,369,369.27

    Price of Diesel 0% 2.15

    Revenue Per Annum 46,296,666.67


    Operating Cost Per Annum 0% 16,295,421.31

    Operating Profit per Annum 30,001,245.35

    Equity and Debt


    ITEM % RM
    Equity 10% 15,836,936.93
    Debt 90% 142,532,432.34
    Debt Repayment per Annum 15,836,936.93
    Interest Rate Per Annum 8% 11,402,594.59

    Per Unit Costing


    ITEM % +/-
    Production Per Annum (Litre) 0% 21,533,333.33
    Variable Operating Cost Per Litre (RM) 0.59
    Fix Operating Cost Per Litre (RM) 0.17
    Interest Cost Per Litre (RM) 0.53

    Margin & Breakeven Point


    ITEM % +/-
    Product Margin 1.56
    Fix Operating Expense 0% 3,573,021.31
    Interest Rate Per Annum 11,402,594.59
    Debt Repayment per Annum 0% 15,836,936.93
    Breakeven (RM) 30,812,552.83
    Breakeven (litres) 19,762,068.89 TRUE

    *Conclusion
    Breakeven and Max production too close 8% Difference
    *Recommendation
    Get one or 2 year grace to build cash reserve
    Increase Debt Repayment Period
    Increse the selling price
    Reduce CAPEX / Debt
    Get lower interest Rate
    Bigger Scale / Increase Production Efficiency

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