Economic viability of a veterinary clinic in the interior of São Paulo

Helder Roberto Dota Janoselli and Renata Maria Christofoleti Furlan

Revista IPecege, 2016, vol. 2, issue 3

Abstract: Domestic animals are assuming great importance in people's lives, increasingly being considered family members. With the growing number of these animals in Brazilian homes, specialized professionals and clinics are needed to meet the demand for animal care and well-being. Given these facts, the objective of this work was to determine the costs and analyze the economic viability of establishing a complete veterinary clinic, similar to a veterinary hospital, that performs everything from basic to complex procedures in one location, in the city of São João da Boa Vista, São Paulo. For this analysis, the necessary investments for the clinic's installation were surveyed, as well as the fixed and variable costs, and the revenue obtained from services. A cash flow was developed, considering a 5-year project lifespan, and an economic viability analysis was performed using the indicators Net Present Value [NPV], Internal Rate of Return [IRR], simple and discounted payback, in addition to sensitivity analysis to assess the effect of variations in investment, revenue, and interest rate on the NPV. The results showed that the veterinary clinic installation project is economically viable, presenting an NPV of R$ 152,049.33, an IRR of 12.68%, a simple payback period of 4.13 years, and a discounted payback period of 4.38 years. The NPV proved to be quite sensitive to changes in revenue, followed by investment, the increase of which negatively affected the NPV. Less sensitivity was observed in relation to changes in the interest rate.

Keywords: Financial; Economics (search for similar items in EconPapers)
Date: 2016
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