Krapchina L.N., Vlazneva S.A., Kotova L.G.Published in:
Russian Journal of Entrepreneurship
– Volume 18, Number 18 (September 2017)

JEL classification: F41, G31, L73

Keywords: business justification of projects, financial feasibility of the project, foreign economic relations, joint activities, production of cabinet furniture, project cash flow


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Abstract:

Today China is the most important foreign economic partner of Russia. The development of foreign economic partnership in small and medium-sized businesses in various areas of entrepreneurial activity is of current importance for neighboring states. The active use of the world experience in developing joint business projects and the adaptation of this experience for Russian-Chinese foreign economic relations will facilitate the implementation of highly effective mutually beneficial innovation and investment projects, the diversification of structure of Russia export to China, and the reorientation of the Russian economy towards innovative development path. Furniture production is one of the promising areas of entrepreneurial activity, facilitating the activation of joint Russian-Chinese small and medium-sized businesses in Russia. In the future it will allow developing business in the border areas of Siberia and the Far East, rationally and effectively using available forest resources, creating additional employment opportunities for Russian citizens. In the article the authors present business justification of the project of production of cabinet furniture from solid woods. We have calculated indicators of feasibility and high economic efficiency of the project. The development and implementation of such projects will strengthen and expand foreign economic cooperation between Russia and China.

Highlights:

•Business justification of joint production project of cabinet furniture from natural wood can become relevant in the framework of joint Russian-Chinese business in the border areas of Siberia and the Far East
•In the Russian market there are a lot of manufacturers of furniture facades made of natural wood, such as Ltd "MebelDrev", Company "Studio of Furniture Facades", Production and Trade Group of Companies "House of Tree"
•We may consider a proposal to produce environmentally friendly furniture for children as of interest
•Evaluation of economic efficiency of the project of production of the cabinet furniture in a joint Russian-Chinese enterprise is an important stage in the process of developing a business justification of a project
•Positive value of the accumulated cash flow of a project is the main condition for the financial feasibility of a project
•In order to strengthen and expand foreign economic cooperation between Russia and China, we need to have a mutually beneficial cooperation in developing joint projects for small and medium-sized businesses

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