FINANCIAL FEASIBILITY STUDY TO DETERMINE THE BEST FUNDING STRUCTURE FOR GARUDA PROJECT IN PT ASGARDIAN MUDA THESIS In partial fulfilment of the requirements for the master’s degree from Institut Teknologi Bandung By Ineu Utami Dewi Student ID: 29123371 (Master of Business Administration Program) INSTITUT TEKNOLOGI BANDUNG JUNE 2025 i ABSTRACT FINANCIAL FEASIBILITY STUDY TO DETERMINE THE BEST FUNDING STRUCTURE FOR GARUDA PROJECT IN PT ASGARDIAN MUDA By Ineu Utami Dewi Student ID: 29123371 (Master of Business Administration Program) As the pharmaceutical industry enters new markets, it encounters more and more financial and regulatory obstacles. The Garuda Project is PT Asgardian Muda's strategic initiative to construct a new pharmaceutical manufacturing facility that conforms with European Good Manufacturing Practices (GMP) standards. This study investigates the financial viability of funding the project. Finding the best funding arrangement that maintains regulatory compliance and guarantees financial sustainability is the main goal. Financial performance analysis, stakeholder evaluation, and investment feasibility assessment are among the qualitative and quantitative methodologies used in the study. Key financial metrics such as Net Present Value (NPV), Internal Rate of Return (IRR), and Weighted Average Cost of Capital (WACC) are used to compare multiple funding configurations, including internal financing, debt-based funding, and hybrid funding models. In addition, sensitivity analysis examines how factors like interest rates, Cost of Good Sales (COGS), demand fluctuation, and delayed regulatory approval could impact the project's financial viability. Findings indicate that all scenarios are financially feasible, with IRRs exceeding the assumed WACC. However, the 50% equity and 50% debt hybrid structure consistently outperform other models, offering the highest NPV (up to IDR 226 billion), a lower WACC (8.74%), and the shortest payback period (2044). Sensitivity analysis reveals that project outcomes are most vulnerable to regulatory approval delays and market demand fluctuations, while moderate sensitivity is observed with changes in COGS and interest rates. A decision matrix was used to justify the hybrid funding recommendation based on quantitative criteria such as financial return, risk exposure, and strategic alignment. The Garuda Project is economically and strategically viable, with the hybrid funding model offering optimal balance between profitability and risk. However, if the company adheres to its internal governance principle of zero-debt financing, the project remains feasible under a 100% equity structure, albeit with reduced financial efficiency. The study provides a strategic blueprint for pharmaceutical firms investing in globally regulated infrastructure and reinforces the importance of aligning financial planning with regulatory and market execution. Keywords: Financial feasibility, funding structure, pharmaceutical industry, investment analysis. ii ABSTRAK STUDY KELAYAKAN FINANSIAL UNTUK MENENTUKAN STRUKTUR PENDANAAN TERBAIK BAGI PROYEK GARUDA DI PT ASGARDIAN MUDA Oleh Ineu Utami Dewi Student ID: 29123371 (Program Studi Magister Administrasi Bisnis) Industri farmasi menghadapi tantangan regulasi yang semakin ketat dan keterbatasan keuangan dalam upaya ekspansi ke pasar baru. Studi ini mengkaji kelayakan finansial dari pendanaan Proyek Garuda, sebuah inisiatif strategis oleh PT Asgardian Muda untuk membangun fasilitas manufaktur farmasi baru yang memenuhi standar Good Manufacturing Practices (GMP) Eropa. Tujuan utama dari penelitian ini adalah untuk menentukan struktur pendanaan yang paling sesuai guna memastikan keberlanjutan finansial dan tetap menjaga kepatuhan terhadap regulasi. Penelitian ini menggunakan kombinasi metodologi kualitatif dan kuantitatif, termasuk analisis kinerja keuangan, evaluasi pemangku kepentingan, dan penilaian kelayakan investasi. Indikator keuangan utama seperti Net Present Value (NPV), Internal Rate of Return (IRR), dan Weighted Average Cost of Capital (WACC) digunakan untuk membandingkan berbagai konfigurasi pendanaan, termasuk pembiayaan internal, pendanaan berbasis utang, dan model pendanaan hibrida. Selain itu, analisis sensitivitas dilakukan untuk mengkaji dampak perubahan suku bunga, Cost of Goods Sold (COGS), fluktuasi permintaan, dan keterlambatan persetujuan regulasi terhadap kelayakan finansial proyek. Hasil temuan menunjukkan bahwa semua skenario pendanaan secara finansial layak, dengan IRR yang melampaui asumsi WACC. Namun, struktur pendanaan hibrida 50% ekuitas dan 50% utang secara konsisten memberikan hasil terbaik, dengan NPV tertinggi (hingga IDR 226 miliar), WACC terendah (8,74%), dan periode pengembalian investasi tercepat (tahun 2044). Analisis sensitivitas menunjukkan bahwa hasil proyek paling rentan terhadap keterlambatan persetujuan regulasi dan fluktuasi permintaan pasar, sementara sensitivitas sedang terjadi pada perubahan COGS dan suku bunga. Matriks keputusan digunakan untuk mendukung rekomendasi pendanaan hibrida berdasarkan kriteria kuantitatif seperti keuntungan finansial, eksposur risiko, dan keselarasan strategis. Proyek Garuda terbukti layak secara ekonomi dan strategis, dengan model pendanaan hibrida menawarkan keseimbangan optimal antara profitabilitas dan risiko. Namun, jika perusahaan memilih untuk tetap berpegang pada prinsip tata kelola internal tanpa utang, proyek ini tetap layak dibiayai dengan struktur 100% ekuitas, meskipun dengan efisiensi keuangan yang lebih rendah. Studi ini memberikan cetak biru strategis bagi perusahaan farmasi yang ingin berinvestasi dalam infrastruktur yang tunduk pada regulasi global, serta menegaskan pentingnya perencanaan keuangan yang selaras dengan pelaksanaan regulasi dan pasar. Kata kunci: Kelayakan finansial, struktur pendanaan, industri farmasi, analisis investasi. iii FINANCIAL FEASIBILITY STUDY TO DETERMINE THE BEST FUNDING STRUCTURE FOR GARUDA PROJECT IN PT ASGARDIAN MUDA By Ineu Utami Dewi Student ID: 29123371 Master of Business Administration Program Institut Teknologi Bandung Approved Dated in 1 st June 2025 Supervisor ___________________________________________ Dr. Raden Aswin Rahadi, ST, MM, MBA v ACKNOWLEDGMENTS All the praise and gratitude present to ALLAH SWT because only ALLAH SWT who endless grace and guidance the author could complete the final project report with title “FINANCIAL FEASIBILITY STUDY TO DETERMINE THE BEST FUNDING STRUCTURE FOR GARUDA PROJECT IN PT ASGARDIAN MUDA”. The main purpose of this report is to fulfil the obligations to become a Master of Business Administration. This paper is dedicated to supports decision- making on the continuation or postponement of the Garuda project by assessing its financial feasibility, specifically its profitability and funding risks at PT Asgardian Muda. The author realizes that the process of making this final project is not easy and has many obstacles, authors would like to thank for those who have helped: 1. Dr. Raden Aswin Rahadi, ST, MBA as the final project advisor, who has guided the author in writing this report, giving a lot of advice, input and time. 2. PT Asgardian Muda, especially operational director and project leader who give me permission, data support and guidance for researching on PT Asgardian Muda 3. The author’s mother and family who always give support and prayers. 4. Sripamesti Putri who has been the best partner of the author during studies at MBA ITB with hard-to-be together. 5. All BLEMBA 70 who helped authors in many things during study at MBA ITB and the preparation of this research. 6. All of the authors' friends that have been supporting during the final project process. Thank you to all those who cannot be named and have supported the author. This report is still far from perfect therefore the author welcomes any advice or input for the future research. The author also hopes that the valuable experiences and knowledge gained can provide benefits to business people across all sectors. Bandung, 15 May 2025 Ineu Utami Dewi vi THESIS GUIDANCE Unpublished masters’ thesis is registered and available in the Library of Bandung Institut of Technology, and is open for public, provided that the author owns the copyright in accordance with the intellectual property rights that are applicable in the Library of Institut Teknologi Bandung. Bibliographical references are allowed to be use in a limited manner; however, the citation and summarization can only be proceeded upon the author’s permission and must include the scientific norm of stating this thesis as the source.