USING THE SENSITIVITY ANALYSIS TO EVALUATE THE PERFOMANCE OF RUBBER MANUFACTURING BUSINESS IN RISK CONDITION, A CASE STUDY OF QUANG BINH PROVINCE

Abstract

Rubber manufacturing business plays an important role in the development of Quang Binh making great contribution to dealing with the jobs and improving the incomes for the local people. However, rubber industry is facing several risks and challenges such as unstable market price, natural disasters, diseases and fluctuating interest rate and etc.....This study using uses sensitivity analysis to evaluate the efficiency of rubber manufacturing business investment in Quang Binh under the risky conditions of prices and interest by identifying the variables which have the biggest influence on net profit and quantify the extent of their influence. This analysis includes a review of testing the impact of one variable and two variables model on NPV (Net Present Value) in rubber manufacturing business. The result on testing the variation in selling price or interest rates to NPV during the periods time 2008-2014 shows that rubber business is effective because NPV is positive in all cases. Hence, it is concluded that although the rubber business in Quang Binh is risky due to the fluctuation of selling price and interest rate, the business is still effective.