Socio-Economic aspect Institutional aspect Managerial aspect

16 process that depends on the production capacity. Production process cost consists of raw material cost, direct labor cost, energy cost, building rent and so on. The benefit that the project will generate has to be clarified as well as possible because the decision that managers will make depends largely upon it. The feasibility of the project can be known through indicators such as Payback Period, Net Benefit Cost Ratio Net BC, Net Present Value NPV, Internal Rate of Return IRR, Break Even Point BEP etc. Payback Period is the length of time from the beginning of the project until the net value of the incremental production stream reaches the total amount of the capital investment. If the duration of the Payback Period is shorter than the duration of the project, the investment is feasible Ibrahim, 2003. Net Benefit Cost Ratio Net BC is the amount of net benefit that is profitable, produced from project financial lost unit. Net benefit is the value of net present income, while cost is the value of negative net present income. The judgment of project feasibility result on net Net BC: if Net BC ≤ 1the project is not feasible and if Net BC 1, the project is feasible Agus, 2011. Net Present Value is the difference of the present value from the benefit and cost flow, which is measured based on certain level of discount. If NPV 0, the project is financially feasible, otherwise the project is not feasible Agus, 2011. Internal Rate of Return IRR is the discount level that makes NPV for a project equal to zero. If IRR is greater than the current interest level, the project is feasible, otherwise the project is not feasible not Agus, 2011.

d. Socio-Economic aspect

Each projectinvestment has not only positive impacts, but also negative ones. These impacts affect both the projectinvestment itself and commit to user 17 the surrounding community. The Socio-Economic aspect rule stipulates that the projectinvestment can be implemented only if it provides more benefitsadvantages rather than disadvantages Kasmir and Jakfar, 2003. Among these benefitsadvantages, we can mention the job opportunities provided by the projectinvestment that decreases the jobless rate, the increase of both gove rnments and households’ incomes, and the increase of the local and regional economy.

e. Institutional aspect

The institutional policy ether national or regional affects directly the implementation of the project Price, 1982. So to have a chance of being carried out, a project must relate properly to the institutional structure. This aspect take into account some question such as: What size of company will be encouraged? Does the project incorporate local institutions and use them to further the project? How will the administrative organization of the project relate to existing agencies? Is there to be a separate project authority? What will be its links to the relevant operating ministries? Will the staff be able to work with existing agencies or will there be institutional jealousies? Etc.

f. Managerial aspect

According to Husein Umar 2003, managerial aspect comprises four activities such as Planning, Organizing, Actuating and Controlling. These activities remain the same either it is for project development or for ongoing Business. Project planning comprises time planning, management level planning, work program planning and investment planning. After developing these parameters, the managers assess the project whether it is realizable or not. The second activity which is project organizing consists of work distribution, departments separation, organization structure realization and so on. perpustakaan.uns.ac.id commit to user 18 Actuating is more art than science. This is the way how to make workers better at their work and more satisfied. The last activity, controlling, aims at evaluating all activities in order to know how far the project objectives are accomplished.

g. Environmental aspect