Financial Projection
Case of Java Island -- Part IV
Preconditions
Tax rate -- I
The tax rate mentioned in Solution 1 and Solution 3 are both set at 50% of the total income the unit of area generates.
Tax Rate -- II
The common tax rate, such as the income tax rate, is set at 20%.
Effect -- III
We base our projections on the condition that only 30,000 hectares have been converted from palm farms to plant other plants. In reality, this statistic must be bigger.
Detailed calculations
SOURCE I -- REVENUE FROM TAXING (SOLUTIONS 1 & 3)
$5000 per hectare (annual value of products on land) * 30,000 hectares (amount of land restored) * 50% (tax rate) = +$750,000,000
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SOURCE II -- REVENUE FROM EXPORT (SOLUTION 1)
Durian:
7,500 hectares * 156 trees/hectare * 150 kg/tree * $4/kg = +$702,000,000
Coffee:
7,500 hectares * 3,000 kg/hectare * $15/kg = +$337,500,000
Teak:
7,500 hectares * 15 m^3 * $3000/m^3 = +$337,500,000
Java Plum:
No revenue, but still occupies 7,500 hectares
Loss of palm:
-$24,700,000,000 (total palm oil revenue) / 15,340,000 hectares * 30,000 hectares = -$48,300,000
Total NET profit: $1,328,700,000
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SOURCE III -- PROFIT OF ECOTOURISM (SOLUTION 2)
$500,000 (estimated revenue) - $200,000 (estimated cost) = +$300,000
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SOURCE IV -- COST OF SUBSIDIES (SOLUTION 4)
Transportation fees:
-$60 (per person per travel) * 2,000,000 (estimated number of emigrants) * 50% (subsidy rate) = -$60,000,000
Rental Fees:
2,000,000 (estimated number of emigrants) * ¼ (4 people share an apartment) * -$1,000 (estimated rental cost in Nusantara per person per month) * 12 (cover 12 months of rent) * 50% (subsidy rate) = -$300,000
Total profit: -$60,300,000
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FOR GOVERNMENT, the total profit is:
SOURCE I + SOURCE II * 0.2 + SOURCE III * 0.2 + SOURCE IV = +$955,500,000
FOR INDIVIDUALS, the total profit is:
-SOURCE I + SOURCE II * 0.8 + SOURCE III * 0.8 - SOURCE IV = +$373,500,000
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According to our economic estimation, besides creating about 50 thousand new jobs, the program could generate approximately 1 billion dollars for the government and 400 million dollars for individuals. We are sure that exports, along with ecotourism revenue, are long-run, sustainable profits, boosting landowner income by about 40%.
From an environmental perspective, this model also provides enormous benefits, including restoring forest area and biodiversity, reviving cultural services, reducing population in Java and thus the pressure of deforestation.
Therefore, it’s safe to conclude that this solution model is sustainable both economically and environmentally.
*We assure that all calculations are based on real statictics.
Time: 2025.4.28
Editor: Tian. Qiu