Implementation Monte Carlo Simulation in Investment Evaluation: Case Study - Gas Compressor Investment PLTG 4 x 25 MW Maleo-Gorontalo

Abdollah Siregar, Sudarso Kaderi Wiryono

2021

Abstract

Investment evaluation is a crucial part before investment decision in order to measure will the project generate profit for the company. This study is investment evaluation Gas Compressor Investment PLTG 4 x25 MW Maleo Gorontalo. There are two investment evaluation method in this project Capital Budg-eting and Monte Carlo Simulation. Capital Budgeting technique used to measure this investment evalu-ation in this project consist of Net Present Value (NPV), Internal Rate Return (IRR), Probability Index (PI) and Payback Period (PBP). From the evaluation, it was obtained that a positive NPV of 500,444, an IRR of 11.50% greater than the WACC of 9%, while the PI of 1.08 and PBP of 1.57 years was faster than the duration of the 2 (two) year contract. Monte Carlo simulation applied to predict the financial feasibility of a project by considering risks and uncertainties use to calculate Probability NPV<0 in this project, with use Capital Expenditure (CAPEX), Lifetime Project and Debt: Equity Portion as the input variables. Monte Carlo simulation result probability NPV <0 is 10,32 % mean while probability NPV >0 is 89,68%

Paper Citation

in Harvard Style

Siregar A. and Wiryono S. (2021). Implementation Monte Carlo Simulation in Investment Evaluation: Case Study - Gas Compressor Investment PLTG 4 x 25 MW Maleo-Gorontalo . In Proceedings of the 3rd International Conference on Applied Economics and Social Science - Volume 1: ICAESS, ISBN 978-989-758-605-7, pages 72-79. DOI: 10.5220/0010935100003255

in Bibtex Style

@conference{icaess21,
author={Abdollah Siregar and Sudarso Kaderi Wiryono},
title={Implementation Monte Carlo Simulation in Investment Evaluation: Case Study - Gas Compressor Investment PLTG 4 x 25 MW Maleo-Gorontalo },
booktitle={Proceedings of the 3rd International Conference on Applied Economics and Social Science - Volume 1: ICAESS,},
year={2021},
pages={72-79},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0010935100003255},
isbn={978-989-758-605-7},
}

in EndNote Style

TY - CONF

JO - Proceedings of the 3rd International Conference on Applied Economics and Social Science - Volume 1: ICAESS,
TI - Implementation Monte Carlo Simulation in Investment Evaluation: Case Study - Gas Compressor Investment PLTG 4 x 25 MW Maleo-Gorontalo
SN - 978-989-758-605-7
AU - Siregar A.
AU - Wiryono S.
PY - 2021
SP - 72
EP - 79
DO - 10.5220/0010935100003255