The Effect of Depreciation Methods on the Profitability and Net Present Value (NPV): A Case Study of Nam Con Son 2 Phase Pipeline Project, Vietnam for the Period of 2019-2037

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Elise, Elise and Daryanto, Wiwiek Mardawiyah (2018) The Effect of Depreciation Methods on the Profitability and Net Present Value (NPV): A Case Study of Nam Con Son 2 Phase Pipeline Project, Vietnam for the Period of 2019-2037. South East Asia Journal of Contemporary Business, Economics and Law, 17 (3). pp. 8-12. ISSN 2289-1560

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Abstract

Different depreciation methods produce different profitability calculations of a project. The Return on Investment (ROI) and the Net Present Value (NPV) are some of the capital budgeting criterias used to evaluate the feasibility of a project investment. The purpose of the study is to measure the effect of the implementation of two depreciation methods, which are straight-line and double declining depreciation methods to the Return on Investment and the Net Present Value. The data were collected from the Vietnam investment opportunity published by Vietnam Oil and Gas Group (Petrovietnam) in 2012 for the investment period of 2019-2037. Straight-line and double declining depreciation methods, time value of money, Net Present Value and Return on Investment were used to analyse the data. The finding shows that the double declining depreciation method improves the Return on Investment and the Net Present Value of the project compared to straight-line depreciation. Keywords: Depreciation, NPV, pipeline project, Vietnam, ROI

Item Type: Article
Subjects: H Social Sciences > H Social Sciences (General)
H Social Sciences > HF Commerce > HF5601 Accounting
H Social Sciences > HG Finance
Divisions: Research And Community Empowerment > Journals
Depositing User: Rizky Amalia
Date Deposited: 23 Jan 2020 03:40
Last Modified: 22 Dec 2021 04:38
URI: http://repository.ipmi.ac.id/id/eprint/553

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