Grouper Project

Topics: Net present value, Internal rate of return, Cash flow Pages: 3 (990 words) Published: November 3, 2014

RISKS
LOCATION RISKFlooding due to typhoons may occur since they have decided to put up the hatchery near the coastal waters of Calauag Bay. Thus, overflowing of the fishponds may occur which would then lead to the fingerlings, juveniles, mature groupers to be carried by the floods. Furthermore, most aqua culture development centers are in the Visayas region. Thus, if unforeseen problem occurs in the growth of their fishes, they are far from the help of the experts in aqua culture. INPUT RISK

Since the Grouper Project plans to use wild-caught brood stock; there is a chance wherein the grouper brood stock contains pathogens and other diseases. Furthermore there is a chance wherein the availability of the brood stocks is bad. With this, they would not be able to start their operations unless they buy fingerlings or brood stock from other hatcheries. FINANCIAL RISK

The main financer of the business is Mr. Art Siaro. The question is if he is able to finance the whole project – which is very costly - if ever the investment requirement forecasted would not be enough. Furthermore, unforeseen external factors such as typhoons may affect the project net cash flows. Will Mr. Art Siaro be able to shoulder these unforeseen loses. TRANSPORTATION RISK

The project plans to transport live fish to Chinese restaurants in Manila, and export companies in Parañaque which is a few kilometres away from the fish pond farm. There are chances that transporting live fish may cause death because of mishandling and stress. MARKETING RISK

The project’s main markets are the export businesses in Parañaque, and Chinese restaurants in Aranque and Ongpin. If ever a problem occurs and they are not able to export their products, they would have to sell to the local market. However, local demand for grouper is quite low because of its high prices compared to most fishes. Thus the company risks losing profit by selling at lower prices just to get rid of their products. ASSESSMENT

OPERATIONAL...
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