Financial Feasibility Assessment of the Smart Eco-Friendly Backpacks Project in Mexico
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Keywords
investment, evaluation, net present value, profitability, eco-friendly backpack.
Resumen
Objective: To determine the financial feasibility of the smart eco-friendly backpack project by calculating the discount rate and the internal rate of return, in order to support the decision to accept or reject the investment proposal.
Design/methodology/approach: Financial project evaluation based on a five-step methodology and the weighted average cost of capital.
Results: An initial investment of $564,420.00 with an 8-year analysis horizon; a discount rate of 12.32%; an internal rate of return of 147.12%; a net present value of $5,588,559.15; a benefit-cost ratio of 1.20; a benefit-to-initial-investment ratio of 10.90; and a payback period of 0.92 years.
Limitations of the study/implications: The results are based on the assumptions made and may not hold true under different conditions.
Findings/conclusions: All indicators meet the acceptance criteria; the financial assessment is positive, and project implementation is recommended, as it represents an attractive investment opportunity. The project not only demonstrates financial profitability but also contributes to environmental sustainability by promoting the use of biodegradable materials.