Research On Economic Feasibility Of Fly Ash Production Project Of Huainan ZB Company

Huainan ZB Fly Ash Development and Utilization Co.,Ltd.is located in Lijiawa,Shangyao,Datong District,Huainan City,Anhui Province.It has registered capital of 10 million RMB and is mainly engaged in the fine processing of fly ash.In order to expand the scale of operation,it is proposed to rebuild and expand a fly ash production line.After technical demonstration,the production scale of the project after rebuilding and expansion is preliminarily determined to be 500,000 tons per year.In order to evaluate the economic feasibility of the technical scheme of fly ash production project of ZB Company in Huainan City,guided by the theory of construction engineering economy and technology economy,this paper uses net cash flow and accumulative net cash flow to analyze the financial viability of the project,uses static payback period and financial net present value to evaluate the profitability of the project,and uses quantity-cost-profit analysis method to evaluates the risk of the proposed project;uses the sensitivity coefficient index to find the sensitive factors of the project and the main source of the project risk;and uses the critical value index to study the early warning value of the proposed project.Through a series of studies,the main conclusions are as follows:(1)The net cash flow of the proposed project is 41.73 million yuan annually during the operation period,and the cumulative net cash flow is positive from the third year.The cumulative net cash flow is 30.73 million yuan during the whole operation period of the project.The annual net cash flow and cumulative net cash flow during the operation period of the project show that the financial sustainability of the project is good and the financial viability is strong.(2)The static payback period of the proposed project is only 2.6 years,which indicates that the investment can be recovered in 2.6 years,and the service period of the project is 10 years,which indicates that the profitability of the project is good;the net present value of the project is 17 million yuan,which indicates that the profitability of the project is better after putting into operation;the calculation results of the static profitability index and the dynamic profitability index show that the profitability of the project is good.(3)Quantity-cost-profit analysis method is used to analyze the risk of the proposed project.When the utilization ratio of production capacity of the project is 15.67%,the profit and loss of the project reach a balance state,which indicates that the project can achieve profit and loss balance with a small production capacity after putting into operation.The risk is relatively small and it is easy to achieve profit.(4)The sensitivity coefficient analysis shows that the sensitivity coefficients of price,operating cost and production period are 4.55,1.90 and 1.23,which indicates that 1% change of the three factors will bring about 4.5%,1.9% and 1.23% change of the project's net financial present value index.Because they are the major impact of the financial net present value index,the price,operating cost and production period are the sensitivity factors of the project.(5)The early warning values of price,operating cost and production period are determined by the critical value index.The critical values of the three sensitive factors are-21.976%,52.68% and-69.23% respectively,which indicates that when the price falls by 21.976%,the operating cost increases by 52.68%,the production period shortens by 69.23%,and the net present value of the technical scheme will be less than 0,the technical scheme will not be feasible.(6)The conclusion of the above research shows that the technical scheme of the proposed project is economically feasible.In order to ensure the normal operation of the reconstruction and expansion project,the paper puts forward five risk prevention and control countermeasures and suggestions according to the research conclusions of the project.Specifically,it includes:(1)strengthening cash flow control of the project;(2)reducing operating costs;(3)doing a good job in price risk prevention and control;(4)ensuring reasonable service life of the proposed project;(5)Doing a good job in early warning management of sensitive factors,etc.