A Feasibility Study of Investment on Truck Yard of AAA Transport Company Limited in Changwat Rayong

Abstract

This study aimed to examine the technical and financial feasibility of truck yard investment
in Rayong province. The study utilized primary and secondary data. Both types of data were used in
descriptive and quantitative analysis. The analytical tools used in this study were Net Present Value
(NPV), Internal Rate of Return (IRR), Modified Internal Rate of Return (MIRR), Profitability Index (PI)
and Switching Value Test (SVT). The result has shown that in the previous days, most of customers
were located in Amatanakorn Industrial Estate in Chonburi province. Afterwards, customers which
located in Hemaraj Eastern Seaboard in Rayong province were increasing when effected to the cost
of transportation process. The wasteful costs werd fuel cost, truck maintenance cost and overtime
cost for driver. The result of the study also shows that if a company builds an additional truck
yard near customers place, the transport distance would be decreased as well as the overtime.
The financial feasibility with age of 20 years and appropriate discount rate of WACC at 8.35 percent
showed that NPV was 2,091,589 Baht, IRR was 10.13 percent, MIRR was 9.15 percent and PI was
1.17. Thus the project was feasible. The switching value test indicated that the revenue could be
down 4.99 percent and operating cost, investment cost and total cost could be up 7.79, 16.16
and 5.26 percent respectively hence the project could be considered moderate risk.