Feasibility study of orange plantation initiatives on state-owned enterprise in Central Java, Indonesia

Department of Agricultural Economics and Social Sciences, Universitas Jenderal Soedirman, Jl. Dr. Suparno, P.O. Box 125, Purwokerto 53123, Central Java, Indonesia

^* Corresponding author: budi.dharmawan@unsoed.ac.id

Abstract

The problem for the company is that its production volume has fallen short of market demand, necessitating the creation of a business scale. Along with scale growth, the market's ability to absorb the product must still be considered. As a result, the study's objectives are to 1) understand the level of investment feasibility of orange farming initiatives, and 2) understand the degree to which that level is sensitive to changes in costs. Using financial feasibility analysis, we assessed the company's ability to generate income as well as the number of costs incurred. With a 16 percent discount rate, the findings demonstrated that the state-owned firm in Brebes District's orange farming was financially viable to implement. The orange financial analysis results per hectare for all land groups show a positive NPV value, an IRR of more than 26 percent, NBC of one, and a BEP of one rupiah less than the actual value. According to the results of the sensitivity analysis using eleven change scenarios and a discount rate of 16 percent, orange farming on a one-hectare plot was possible for all change scenarios. Financial feasibility, oranges, and a state-owned firm are all.