Technical, financial, and economic feasibility of the Pine sawing process in the central-southern region of the state of Chihuahua, México Technical, financial, and economic feasibility of the Pine sawing process in the central-southern region of the state of Chihuahua, México

Abstract

The objective of this research was to evaluate the technical, financial, and economic feasibility of the pine sawing process in the south-central region of the state of Chihuahua, Mexico, to determine its potential as a sustainable source of income for local communities and its contribution to climate change mitigation. The results show a positive trend in cash flows, accumulating a total of 16.43 million pesos over six years. Although there were deficits in 2024 and 2029, the project quickly recovered, generating positive cash flows afterward, demonstrating an adequate capacity to cover operating costs and financial commitments with increasing revenues. Net profits reached 10.40 million pesos, consistently growing to 2.41 million in 2029, reflecting improvements in operational efficiency and profitability. The Internal Rate of Return (IRR) of 7.95% indicates that the project can recover the initial investment, and a positive Net Present Value (NPV) at a rate of 34.91% suggests that the project is viable and profitable above its capital cost. Fixed costs remain stable, and variable costs increase linearly with production. The break-even point is at 0.39 million board feet, where revenues equal total expenses. Exceeding this point is crucial for profitability. The project's average sustainability is acceptable, with an average annual profit of approximately $500,000.00, indicating that despite fluctuations, the project can maintain consistent profitability with efficient management.