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Financial Feasibility Analysis of Natura Rab Business: Case Study
In 2015 Natura Rab decided to provide three very important investments that will greatly change and facilitate its future business activities, especially the first project. The first and largest financial investment is the construction of the new organic shop with products at the central farm called Natura Rab. The second investment project is the new 2500 m2 olive plantation. The third investment in the analyzed family company is related to the beekeeping sector, and it involves several activities like buying new beekeeping equipment and new work vehicle. Before implementing the three investment projects, some financial parameters for the further assessment of investments were used, such as the net present value (NPV) and the internal rate of return (IRR). The investment value of the new shop is 38315.88 €, and the annual cash flow is 13,288 €. The net present value at the discount rate of 5.5% in the fourth year is 8260.55 €. The internal rate of return is 14.51%. The investment value for the second project, the new olive plantation, is 6620 €, and the annual cash flow is 2664.02 €. The net present value at the discount rate of 5.5% in the third year is 567.35 €. The internal rate of return is 10.04%. The investment value of the beekeeping sector for this year is 18428.50 €, and the annual cash flow is 41537.20 €. The net present value at the discount rate of 5.5% after the first year is 20943.25 €.
Part of the book: Operations Research