INVETSMENT ANALYSIS WHICH RELEVANCE MEASUREMENT FOR GOVERNMENT COMPANY (BUMN) - CASE OF COAL POWER GENERATION

Assagaf, Aminullah (2014) INVETSMENT ANALYSIS WHICH RELEVANCE MEASUREMENT FOR GOVERNMENT COMPANY (BUMN) - CASE OF COAL POWER GENERATION. In: International Multidiciplining Conference, 12 - 13 November 2014, Jakarta.

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Abstract

Equity-based approachMIRRismorerealisticwhen usedinoperational decision-making of a state-owned enterprises(SOEs). Investment decisionin the SOEs is verystrategicbecause theircapitalizationscale is material enough, having a considerable impact onthe state budgetand influencingeconomicgrowthand public welfare. The approachused thus far is a project-basedIRR which mayreflectunrealistic conditionasbusinesspractices occurringin thebusiness world. The IRRapproach has a weaknessbecause it does notaccount forsurpluscash inflowas a sourceof fundwhich is in realityusedto financenewprojects, acceleratethe paymentof debt, andcanbe usedfor the company's operational activity. MIRRapproach accounts forbenefitgainsoversurplus cash inflow based uponreinvestrate in accordance with thefield selected. Calculation of cash flow thatis morerealisticinfeasibility analysis should beequity-based asreality occurringin thebusiness world. The calculationdone thus far is stillusing project basis so it does notreflectrealistic conditionbecausethe owners ofthe project onlyinvest capitalina relativelysmallamount, for example, about 30% -35%, the restis financedby banks, while thedebtandinterestpayments arefinancedby the internalcapabilities of the investment concerned, so thata realisticcash outflowislimited toequityinvested by theowners. The size ofthe investmentreturn ofthe ownersshould be based onthe fundspentby the owner, notbased onthe overall valueof the investment. The management ofstate-owned enterprises(SOEs) in the futureis comingto realizethe importance ofchanging an approachtowardsa morerealistic one, so as to boostthe performance ofSOEsin questionandprovide added values tostakeholders.

Item Type: Conference or Workshop Item (Paper)
Subjects: H Social Sciences > HJ Public Finance
Divisions: Fakultas Ekonomi dan Bisnis
Depositing User: Lambang Probo Sumirat
Date Deposited: 11 Feb 2016 05:45
Last Modified: 11 Feb 2016 05:45
URI: http://repository.unitomo.ac.id/id/eprint/17

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