A Feasibility Study of Investment on Foreign Exchange Business in Pattaya: The Case of Run Exchange Co., Ltd.

Abstract

The aims of this study were to 1) study the overview of foreign exchange business in Pattaya  2) analyze the financial feasibility of foreign exchange business in the case of Run Exchanges Co., Ltd.

Both descriptive and qualitative analyses are employed in this study. Financial tools consist of Cash flow Payback period, Net Present Value, Internal Rate of Return, Benefit Cost Ratio and Sensitivity analysis.

The results of this study showed that  1) The foreign exchange business is expanding continuously. In addition, the competition has intensified due to the coming of the Non-Bank group. However, Pattaya has many factors that promote the feasibility of investing, i.e. the attractions places, State policies promoting convenient transportation to visit Pattaya.  2) The financial feasibility study revealed that the payback period of the project was 2 years 3 months.  The net present value of the foreign exchange business is 2,426,985.42 bahts in the case of Run Exchange Co., Ltd. discounted at 8 percent over a period of 10 years to be used in investment decisions. Internal Rate of Return is 45%. The return on cost is 1.49 times.  Therefore, it is possible to invest in this business in Pattaya.  In the case of sensitivity analysis, the change of the discount rate from 5% to 10% is still worth to invest but in terms of revenue reduction from 8, 9, 10 percent revealed that it is not worth to invest.