Financial feasibility for new product development : pilot project of Edamame Milk
Neza Fadia Rayesa1*, Dego Yusa Ali2, Teti Estiasih2

1Department of Socio-Economics, Faculty of Agriculture, University of Brawijaya, Jl. Veteran, Malang 65145, Indonesia
2Department of Food Science and Biotechnology, Faculty of Agricultural Technology, University of Brawijaya, Jl. Veteran, Malang 65145, Indonesia
Email: nezafadia[at]ub.ac.id

Abstract

This paper focuses on analyzing the financial feasibility of developing a new product line in the form of edamame milk powder. The low penetration strategy is used in pricing with the aim of gaining market share from substitute product competitors. The feasibility study can be a tool for considering the implementation of this strategy in the short term and alternative strategies for the long term. Data collected through observation, interviews with experts, and literature studies. Analysis for financial feasibility is done by Breakeven Point (BEP), Payback Period (PP), Net Present Value (NPV), and Internal Rate Return (IRR) indicators. The result shown that the NPV value is positive, the payback period is smaller than the project life, and the IRR value is more than the interest rate. However, this pilot business is sensitive to sales volume while a minor falls in sales can result in large changes in the NPV and IRR values.

Keywords: feasibility analysis- financial feasibility- new product development analysis

Topic: Bioeconomy in agro-industry