Proceedings of the First International Conference of Economics, Business & Entrepreneurship, ICEBE 2020, 1st October 2020, Tangerang, Indonesia

Research Article

Analysis of The Decision to Buy or Lease Business Space at PT UMB

Download620 downloads
  • @INPROCEEDINGS{10.4108/eai.1-10-2020.2304912,
        author={Sri  Lusiana and Budi  Frensidy},
        title={Analysis of The Decision to Buy or Lease Business Space at PT UMB},
        proceedings={Proceedings of the First International Conference of Economics, Business \& Entrepreneurship, ICEBE 2020, 1st October 2020, Tangerang, Indonesia},
        publisher={EAI},
        proceedings_a={ICEBE},
        year={2021},
        month={4},
        keywords={npv analysis apv analysis discount rate},
        doi={10.4108/eai.1-10-2020.2304912}
    }
    
  • Sri Lusiana
    Budi Frensidy
    Year: 2021
    Analysis of The Decision to Buy or Lease Business Space at PT UMB
    ICEBE
    EAI
    DOI: 10.4108/eai.1-10-2020.2304912
Sri Lusiana1,*, Budi Frensidy2
  • 1: University of Indonesia
  • 2: Atma Jaya Catholic University of Indonesia
*Contact email: srilusiana@hotmail.com

Abstract

The franchise business of minimarket requires business stores to place merchandise. It can be obtained in several ways. Three of them are buying, renting, and buying with loan. The purpose of this study is to apply the NPV (Net Present Value) and APV (Adjusted Present Value) analysis to choose the business store. NPV and APV analysis are used to obtain the most favorable choice for business store of a minimarket. The results of the analysis carried out on the data and assumptions obtained, it can be concluded that there is no choice between renting and buying with loan that is always superior to all conditions in providing business space. Many factors influence every decision, including the percentage of rental prices compared to the value of land and buildings, the growth of land price, and the amount of discount rates or the returns expected by the company.