3.2.

2 General Expenses
General expense is an expense related to the routine expenses of a plant office
to support the operational activity of the plant. The component in general expenses are
administrative cost, marketing and distribution cost, annual research and development
cost, and annual financial interest cost for 10 years of plant’s life expectancy.
3.2.2.1 Administrative Cost
Administrative cost is the cost which is needed for the communication of the
whole activities in plant. The communications cost is one of the components in general
expenses. This calculation is useful for determining the cost of supporting offices in
communicating with outside parties such as suppliers or the retailers. Detail of the cost
of communication is as follows.
Table X. Communication Cost

Component Cost/month Cost/year

Telephone and fax Rp900,000 Rp10,800,000
Internet 25 Mbps Rp835,000 Rp10,020,000
Total Rp20,820,000

3.2.2.2 Marketing and Advertising Cost

Marketing cost is the cost that will used to promoting the product. The
advertisements are conducted on social media, online media and booth. For the social
media, the author uses most social media app that usually used by people, so the
customer can see the product when enjoying the feeds in the slide. For online media
advertising, the author chooses to make a website. While for booth, the author chooses
to open booth in wholesaler to introduce the consumer about the product. The detail of
marketing cost will be describing in table X below.

Table X Marketing Cost

Media Cost Times Annual Cost
Social Media
Google Adward
Rp110,000 240 Rp26,400,000
Facebook
 Instagram
Website
Creating Website Rp5,000,000 1 Rp5,000,000
Website Maintenance Rp3,000,000 1 Rp3,000,000
Booth
Rent Space in supermarket Rp25,000 48 Rp1,200,000
Decoration Rp3,000,000 1 Rp3,000,000
Transportation Rp150,000 48 Rp7,200,000
TOTAL MARKETING COST
Rp45,800,000

3.2.2.3 Distribution Cost

A distribution cost is cost component that is used to deliver the product from
the manufacturer to the consumer. The detail of marketing cost will be describing in
table X below.
 Table X. Distribution Cost

Total Solar Total product Total shipping

Distance Time Cost of Cost of Road cost
Region From To time Consumption shipping cost cost per lane
(km) (hr) fuel/trip service (IDR)
(hr) (L) per month (IDR) per year
Plant (serang) Malang 895 12 89.5 Rp460,925 Rp957,000 Rp1,417,925 Rp17,015,100
Malang Surabaya 93 2 9.3 Rp47,895 Rp38,000 Rp85,895 Rp1,030,740
Pelabuhan
Surabaya Ketapang 212 4.1 21.2 Rp109,180 Rp12,000 Rp121,180 Rp1,454,160
Pelabuhan Gilimanuk
Ketapang Harbour 91 2.38 9.1 Rp46,865 Rp395,000 Rp441,865 Rp5,302,380
Region 4 Gilimanuk 42.47
Harbour Bali 120 3.13 12 Rp61,800 Rp61,800 Rp741,600
Gilimanuk
Bali Harbour 123 2.98 12.3 Rp63,345 Rp63,345 Rp760,140
Gilimanuk Pelabuhan
Harbour Ketapang 91 2.38 9.1 Rp46,865 Rp395,000 Rp957,000 Rp1,398,865 Rp16,786,380
Pelabuhan Plant
Ketapang (serang) 995 13.5 99.5 Rp512,425 Rp957,000 Rp1,469,425 Rp17,633,100
Plant (serang) Jogja 615 8.96 61.5 Rp316,725 Rp382,000 Rp698,725 Rp8,384,700
Jogja Semarang 130 2.38 13 Rp66,950 Rp23,000 Rp89,950 Rp1,079,400
Region 3 Semarang Bandung 437 5.5 21.22 43.7 Rp225,055 Rp410,000 Rp635,055 Rp7,620,660
Bandung Bogor 184 3.05 18.4 Rp94,760 Rp81,000 Rp175,760 Rp2,109,120
Plant
Bogor (serang) 92 1.33 9.2 Rp47,380 Rp203,000 Rp250,380 Rp3,004,560
Plant (serang) Bekasi 78 1.42 7.8 Rp40,170 Rp42,000 Rp82,170 Rp986,040
East
Bekasi Jakarta 13 0.4 1.3 Rp6,695 Rp0 Rp6,695 Rp80,340
Region 2 3.82
East Jakarta Depok 36 0.87 3.6 Rp18,540 Rp13,000 Rp31,540 Rp378,480
Plant
Depok (serang) 59 1.13 5.9 Rp30,385 Rp95,500 Rp125,885 Rp1,510,620
South
Plant (serang) Jakarta 55 1 5.5 Rp28,325 Rp39,000 Rp67,325 Rp807,900
Central
Region 1 3.12
South Jakarta jakarta 13 0.4 1.3 Rp6,695 Rp0 Rp6,695 Rp80,340
North
Central jakarta Jakarta 9.7 0.28 0.97 Rp4,996 Rp0 Rp4,996 Rp59,946
 West
North Jakarta Jakarta 22 0.48 2.2 Rp11,330 Rp15,500 Rp26,830 Rp321,960
West Jakarta Tangerang 15 0.45 1.5 Rp7,725 Rp0 Rp7,725 Rp92,700
Plant
tanggerang (serang) 27 0.51 2.7 Rp13,905 Rp12,000 Rp25,905 Rp310,860
Total Shipment and Distribution Cost Rp87,551,226.00
 5

3.2.2.4 Research and Development

The research and development cost cover the expenses needed for market and
product research. The details for the expenses can be seen as follows.

Table X. Research and Development Cost

Activity Quantity Cost Total Cost
Consultant 1 Rp10,000,000 Rp10,000,000
Survey market 1 Rp2,500,000 Rp2,500,000
TOTAL RESEARCH AND DEVELOPMENT COST Rp12,500,000

3.3 Economic Analysis

After the author have determined and classified costs and expenses needed to
build the plant, start the production and produce the product annually, in this part, those
data that obtained before is used to determine selling price of the product, cash flow,
and the cost breakdown of the product.
3.3.1 Product Pricing per Unit
Minimum price per unit can be calculated from Net Present Value if the value
is equal to zero, or if WACC (Weigh Average Cost of Capital) = DCRR (Discounted
Cash Flow of Return Rate). The equation is
n T n T
CFn
0
CFn
NPV    TCI  TCI
n 1 1  i n
n 1 1  r n

The author used goal seek method to find the minimum price of product. The
value of WACC = DCRR = 10,31% is obtained from WACC Expert™ for Health Care
Industry in Indonesia. Using goal seek method, the minimum price of the product is Rp
24,705 Below are the table of balanced cash flow to find the minimum price. Other
than that, the author assumes that there are several differences in the percentage of
selling capacity because the author try to make realistic a scenario as possible. During
the first year the percentage of the selling capacity is only 50% because dr.stain
deodorant is still brand new and many consumer are still not aware of the product. After
the first year, the selling capacity will increase until 100% by assuming that the product
will reach its highest peak of selling due to the mouth to mouth, marketing strategy,
 6

etc. After the following year the selling capacity will decrease to 95% because only
loyal consumer will stay and use the product.
 7

Table X. Balanced Cash Flow to Find Minimum Price of Product

Maintenance
Year Product Price % Capacity Unit Sold Revenue Opex Loan Interest Cash Expenses
Cost
0 2020 Rp24,705 0 0 0 0 0 0 0
1 2021 Rp24,705 50% 1152000 Rp28,459,686,914.14 Rp34,429,145,156 Rp127,229,585 Rp11,091,161,417 Rp45,647,536,158
2 2022 Rp24,705 65% 1497600 Rp36,997,592,988 Rp34,430,045,156 Rp127,229,585 Rp10,352,984,035 Rp44,910,258,776
3 2023 Rp24,705 75% 1728000 Rp42,689,530,371 Rp34,430,045,156 Rp127,229,585 Rp9,614,806,653 Rp44,172,081,394
4 2024 Rp24,705 85% 1958400 Rp48,381,467,754 Rp34,430,045,156 Rp127,229,585 Rp8,876,629,271 Rp43,433,904,012
5 2025 Rp24,705 100% 2304000 Rp56,919,373,828 Rp34,430,545,156 Rp127,229,585 Rp8,138,451,889 Rp42,696,226,630
6 2026 Rp24,705 100% 2304000 Rp56,919,373,828 Rp34,430,995,156 Rp127,229,585 Rp0 Rp34,558,224,741
7 2027 Rp24,705 100% 2304000 Rp56,919,373,828 Rp34,431,595,156 Rp127,229,585 Rp0 Rp34,558,824,741
8 2028 Rp24,705 100% 2304000 Rp56,919,373,828 Rp34,432,095,156 Rp127,229,585 Rp0 Rp34,559,324,741
9 2029 Rp24,705 95% 2188800 Rp54,073,405,137 Rp34,432,795,156 Rp127,229,585 Rp0 Rp34,560,024,741
10 2030 Rp24,705 95% 2188800 Rp54,073,405,137 Rp34,433,295,156 Rp127,229,585 Rp0 Rp34,560,524,741
 Table X. Balanced Cash Flow to Find Minimum Price of Product (continued)
Net Profit Before Net Profit After After Tax Cummulative
Year Gross Profit Depreciation All Expenses
Tax Tax Cashflow Cashflow
0 2020 0 0 0 0 0 -37001372535 -37001372535
1 2021 -Rp17,187,849,244 Rp153,547,629 Rp45,801,083,788 -Rp17,341,396,874 -Rp17,341,396,874 -Rp17,341,396,874 -Rp54,342,769,409
2 2022 -Rp7,912,665,788 Rp142,678,466 Rp45,052,937,243 -Rp8,055,344,254 -Rp8,055,344,254 -Rp8,055,344,254 -Rp62,398,113,663
3 2023 -Rp1,482,551,023 Rp132,761,652 Rp44,304,843,046 -Rp1,615,312,675 -Rp1,615,312,675 -Rp1,615,312,675 -Rp64,013,426,338
4 2024 Rp4,947,563,742 Rp123,705,988 Rp43,557,610,000 Rp4,823,857,754 Rp3,617,893,316 Rp3,617,893,316 -Rp60,395,533,022
5 2025 Rp14,223,147,198 Rp115,429,275 Rp42,811,655,905 Rp14,107,717,923 Rp10,580,788,442 Rp10,580,788,442 -Rp49,814,744,580
6 2026 Rp22,361,149,087 Rp107,857,417 Rp34,666,082,158 Rp22,253,291,670 Rp16,689,968,753 Rp16,689,968,753 -Rp33,124,775,827
7 2027 Rp22,360,549,087 Rp100,923,612 Rp34,659,748,353 Rp22,259,625,475 Rp16,694,719,106 Rp16,694,719,106 -Rp16,430,056,721
8 2028 Rp22,360,049,087 Rp94,567,630 Rp34,653,892,371 Rp22,265,481,457 Rp16,699,111,093 Rp16,699,111,093 Rp269,054,372
9 2029 Rp19,513,380,396 Rp88,735,155 Rp34,648,759,896 Rp19,424,645,241 Rp14,568,483,930 Rp14,568,483,930 Rp14,837,538,302
10 2030 Rp19,512,880,396 Rp83,377,199 Rp34,643,901,940 Rp19,429,503,197 Rp14,572,127,398 Rp54,208,831,838 Rp69,046,370,140
 The minimum price value has not included the profit. The product price that the author
wanted is Rp 30.000, so the margin value can be obtained from this equation.
𝑅𝑝 30,000 − 𝑅𝑝 24,705
𝑀𝑎𝑟𝑔𝑖𝑛 𝑣𝑎𝑙𝑢𝑒 = × 100% = 21.4%
𝑅𝑝 24,705
3.3.2 Cash Flow
Cash flow visualizes the inflow and outflow in the form of cash through period of time
from the beginning to the end of the project. In making cash flow, the component used are listed
below.
• Year
• Capacity and Price
• Revenue = Total income
• OPEX
• Maintenance Cost
• Depreciation
• Cash Expenses
• Total Expenses = Cash Expenses + Depreciation
• Before Tax Cash Flow = Gross Profit = Revenue – Cash Expenses (without depreciation)
• Net Profit Before Tax (NPBT) = Revenue – Total Expenses
• Net Profit After Tax (NPAT) = Revenue – Total Expenses – Income Tax • Income Tax =
(Revenue – Total Expenses) x Tax
• After Tax Cash Flow = Net profit + Depreciation = Revenue – Cash Expenses – Income
Tax
• Cumulative Cash Flow
To simplify, there are two segments in the cash flow, which are after tax cash flow and
before tax cash flow. The inflow of the cash flow comes from the revenue of selling the product,
and the outflow of the cash flow comes from capital and operating cost. To calculate income tax,
depreciation must be included as it will be reducing factor to the income tax. The profit after
inclusion of depreciation is called the net profit.
In the next section, product prices will be determined to be Rp 30.000 per unit with a
production capacity of 2.304.000 per year. Production capacity from the beginning to 2030 is
assumed to vary from the specified capacity. Last year, the end of the project was assumed to take
95% of production capacity. Calculations for cash flow are provided in the table below.
 Tabel …. Calculation of Cash Flow
% Unit Maintenance
Year Revenue OPEX Depreciation Cash Expenses All Expenses
Capacity Sold Cost
0 2020 0 0 Rp - Rp - Rp - Rp - Rp - Rp -
1 2021 50% 1152000 Rp 34,560,000,000 Rp 34,426,390,106 Rp 127,229,585 Rp 153,547,629 Rp 34,553,619,691 Rp 34,707,167,320
2 2022 65% 1497600 Rp 44,928,000,000 Rp 34,427,290,106 Rp 127,229,585 Rp 142,678,466 Rp 34,554,519,691 Rp 34,697,198,157
3 2023 75% 1728000 Rp 51,840,000,000 Rp 34,427,290,106 Rp 127,229,585 Rp 132,761,652 Rp 34,554,519,691 Rp 34,687,281,343
4 2024 85% 1958400 Rp 58,752,000,000 Rp 34,427,290,106 Rp 127,229,585 Rp 123,705,988 Rp 34,554,519,691 Rp 34,678,225,679
5 2025 100% 2304000 Rp 69,120,000,000 Rp 34,427,790,106 Rp 127,229,585 Rp 115,429,275 Rp 34,555,019,691 Rp 34,670,448,966
6 2026 100% 2304000 Rp 69,120,000,000 Rp 34,428,240,106 Rp 127,229,585 Rp 107,857,417 Rp 34,555,469,691 Rp 34,663,327,108
7 2027 100% 2304000 Rp 69,120,000,000 Rp 34,428,840,106 Rp 127,229,585 Rp 100,923,612 Rp 34,556,069,691 Rp 34,656,993,303
8 2028 100% 2304000 Rp 69,120,000,000 Rp 34,429,340,106 Rp 127,229,585 Rp 94,567,630 Rp 34,556,569,691 Rp 34,651,137,321
9 2029 95% 2188800 Rp 65,664,000,000 Rp 34,430,040,106 Rp 127,229,585 Rp 88,735,155 Rp 34,557,269,691 Rp 34,646,004,846
10 2030 95% 2188800 Rp 65,664,000,000 Rp 32,709,013,101 Rp 120,868,105 Rp 83,377,199 Rp 32,829,881,206 Rp 32,913,258,405
 Tabel …. Calculation of Cash Flow (Continued)
Before Tax Cash Net Profit Before Net Profit After After Tax Cash Cummulative Cash
Income Tax NPV IRR ROI
Flow Tax Tax Flow Flow
-Rp 35,998,617,485 -Rp 35,998,617,485 Rp - -Rp 35,998,617,485 -Rp 35,998,617,485 -Rp 35,998,617,485
Rp 6,380,309 -Rp 147,167,320 -Rp 36,791,830 -Rp 110,375,490 Rp 43,172,139 -Rp 35,955,445,346
Rp 10,373,480,309 Rp 10,230,801,843 Rp 2,557,700,461 Rp 7,673,101,382 Rp 7,815,779,848 -Rp 28,139,665,498
Rp 17,285,480,309 Rp 17,152,718,657 Rp 4,288,179,664 Rp 12,864,538,993 Rp 12,997,300,645 -Rp 15,142,364,853
Rp 24,197,480,309 Rp 24,073,774,321 Rp 6,018,443,580 Rp 18,055,330,741 Rp 18,179,036,729 Rp 3,036,671,876
Rp 34,564,980,309 Rp 34,449,551,034 Rp 8,612,387,759 Rp 25,837,163,276 Rp 25,952,592,550 Rp 28,989,264,426 Rp 61,675,424,573 33.24% 35.74%
Rp 34,564,530,309 Rp 34,456,672,892 Rp 8,614,168,223 Rp 25,842,504,669 Rp 25,950,362,086 Rp 54,939,626,512
Rp 34,563,930,309 Rp 34,463,006,697 Rp 8,615,751,674 Rp 25,847,255,022 Rp 25,948,178,635 Rp 80,887,805,147
Rp 34,563,430,309 Rp 34,468,862,679 Rp 8,617,215,670 Rp 25,851,647,009 Rp 25,946,214,639 Rp 106,834,019,786
Rp 31,106,730,309 Rp 31,017,995,154 Rp 7,754,498,788 Rp 23,263,496,365 Rp 23,352,231,521 Rp 130,186,251,307
Rp 36,923,121,063 Rp 32,750,741,595 Rp 8,187,685,399 Rp 24,563,056,196 Rp 28,735,435,664 Rp 154,832,684,702
 On the beginning of the project, before tax cash flow equals after tax cash flow
because of tax income’s absent. In the proceding year, before tax cash flow is always
higher than after tax cash flow. In the end of the project, there is recovery of capital
investment indicated by salvage value. This cash flow is useful for profitability and
sensitivity analysis in the next section.

CASH FLOW
Rp60,000,000,000

Rp40,000,000,000

Rp20,000,000,000

Rp-
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
-Rp20,000,000,000

-Rp40,000,000,000
Year

Before Tax Cash Flow After Tax Cash Flow

Figure.. Dr.Stain Manufacture Cash Flow

3.3.3 Cost Breakdown

In order to see the most determining part of the CAPEX and OPEX in the Cost
of the product, the expenditures are broken down into its part and then the contribution
of the parts into the price of the product. Each contribution is calculated by dividing
the total expenditure per unit time by total product sold per unit time.
The most contributing expenditures are going to be used in Sensitivity Analysis.
The detailed calculation for Cost Breakdown are tabulated in Table Y and graphically
presented in Figure X.
 Table x Detailed Cost Breakdown
Cost
Total Per product Percentage
Breakdown
CAPEX
TCI Rp35,998,617,485 Rp1,806.29 9.43%
OPEX
Manufacturing Cost
Raw Material Rp29,266,934,585 Rp14,685.16 Rp1
Labour & Rp4,717,500,000 Rp2,367.08 Rp0
Executive Salary
Utility Rp62,778,604 Rp31.50 Rp0
Patent & Rp127,229,585 Rp63.84 Rp0
Royalty
Local Tax Rp55,039,770 Rp27.62 Rp0
Insurance Rp148,793,352 Rp74.66 Rp0
Plant Overhead Rp12,500,000 Rp6.27 Rp0
General Expenses
Marketing and Rp66,620,000 Rp33.43 Rp0
Communication
Distribution Rp87,551,226 Rp43.93 Rp0
Research and Rp12,500,000 Rp6.27 Rp0
Developement
Rp19,146.05
 Cost Breakdown Rp0
Rp0
Rp0
Rp0
Rp0
TCI Rp0 Rp0
Rp0
Manufacturing Cost
Raw Material 9.43%
Rp0
Labour & Executive Salary
Utility
Patent & Royalty
Local Tax
Insurance
Plant Overhead
General Expenses
Marketing and Communication
Distribution
Research and Developement
Rp1

Figure x Detailed Cost Breakdown