Analysis of Alternative Investment to Utilize The Vacant Land of CV XXX

Karina Ardianti, Yunieta Anny Nainggolan

Abstract

The research described in this paper was conducted to help CV XXX chosing the best expansion alternative for
its current business. CV XXX is a distribution company based in Cimahi, with area of distribution covering Cimahi
and Bandung Barat Districts. To compete better in current market situation, CV XXX intended to expand its
business while at the same time utilize CV XXX owner’s unused land there. CV XXX then needed to consider the
following two options for the expansion: (1) to open another distribution company or (2) to build a futsal arena
for rent; by calculating those options’ valuation using DCF analysis (option that provides a higher value to CV
XXX will be chosen).
The result then showed that the option to open another distribution company is more favorable since it
produces higher expected value than the futsal arena option. Distribution company option value amounted to
Rp 9,093,296,121, while on the other hand futsal arena option produces only a value amounted to Rp
907,923,134.

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