Financial Feasibility Study of the Construction of New High School Building (Case Study of XYZ Foundation)

Abstract

XYZ Foundation manages several unit of different education levels as part of private education sector. At the time being, the Foundation sees a necessity to encourage the development of one of its units, namely the high school unit. Continuous curriculum development and the addition of classes and facilities require more space to be realized so the school can admit more student, as the interest of prospective students continues to increase every year. But the current school building cannot accommodate any more development. The current high school unit area is still integrated with the junior school unit area. This happen because the junior school unit was built first by the Foundation and later the high school unit. And because of that, the junior school unit occupy most of the area dan already has a better and more comprehensive facilities than the high school. So, the foundation decided to construct a new building for high school unit in separate area. And it is expected that in the school year of 2021 the new buildings are ready to welcome the students. This financial feasibility study is conducted to assess whether the project is feasible or not. The parameters used to assess the project are Net Present Value (NPV), Internal Rate Return (IRR), Payback Period (PBP), Profitability Index (PI) and risk analysis is also conducted.