Financial Feasibility Study for New Investment in New Digital Product of PT Telkom Indonesia (Case Study: SKP Project)



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Submitted Sep 28, 2020
Published Oct 7, 2020
10.24018/ejbmr.2020.5.5.558

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SKP is an integrated stock management system application. With SKP, PT Telkom Indonesia provides solutions to business owners in the form of connectivity and services. Proper planning of business strategy is needed based on a proper feasibility study, so SKP project can generate economic benefits for PT Telkom Indonesia and all the stakeholders. SKP has not calculated the financial projections for it to proceed to the market and meet PT Telkom Indonesia regulation. A financial feasibility study would measure the revenue projection, and cost structure such as cash flow, balance sheet, and income statement projection. At the end of this model, there will be a conclusion of the feasibility of the project using internal rate of return (IRR), net present value (NPV), and payback period (PP) as parameters. If the project is feasible, there will be a sensitivity risk analysis to find out the most sensitive variable. According to feasibility test result, it is concluded that the SKP project can benefit PT Telkom Indonesia. This can be seen from the FCFF calculation which results in a positive NPV with a value of Rp 5.229.648.128, and IRR of 67,26% which is greater than the project WACC of 17,94%. From the payback period requirements set by PT Telkom Indonesia, the project is estimated to have a PP of 2,02 years. The result of SKP's financial projections is also supported by Monte Carlo simulations which show the effect of changes to influential variables, with simulation results show a possible NPV> 0 of 87,53%.

Keywords: Feasibility Study, Digital Product, Risk, Telkom, FCFF, WACC, NPV, IRR, PP

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