Feasibility Study of Infrastructure Investment (Tail Dock) Using Net Present Value (NPV), Internal Rate of Return (IRR), and Payback Period (PP) Methods
Abstract
In the aviation maintenance, repair, and overhaul (MRO) sector, facility adequacy is crucial to meet increasing service demands. PT ABC, a leading MRO company, faced a bottleneck due to a lack of tail dock infrastructure, impacting its ability to fulfill aircraft maintenance orders. This study evaluates the investment feasibility of constructing or purchasing a movable tail dock for Line B operations. The financial analysis was conducted using Net Present Value (NPV), Internal Rate of Return (IRR), and Payback Period (PP) methods. Results show that manufacturing the movable tail dock internally yields a Net Present Value (NPV) of IDR 673,580,000, an Internal Rate of Return (IRR) of 18.25%, and a Payback Period (PP) of 9.7 years. These results indicate that the investment is financially feasible, as NPV is positive, IRR exceeds the company's Minimum Attractive Rate of Return (MARR), and the Payback Period is within acceptable limits. Thus, building the movable tail dock internally is the preferred investment option.Downloads
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