Feasibility analysis

Feasibility analysis
Feasibility analysis is the process of evaluating the future of the project within the limitations of the project implementing body and the constraints imposed on the project by environment.. The project identified are normally analyzed on the basis of technical, mktg, financial factors..

(i). Prefeasibility study

The project idea must be elaborated in a more detailed study. The principal objective of such is to determine whether The investment opportunity is promising? The project concept justified a detailed analysis by pre-feasibility study. In depth investigation through functional or support studies. Eg-mkt survey.

(ii). Feasibility study

It is the most important part of project analysis. This implies the investigating the project from six different aspects economic, technical, managerial, organizational, commercial and financial. The feasibility study is an iterative process covering all the aspect of an investment project.

2. Techno-economic analysis
Techno-economic analysis is primary concerned with the identification of the project demand potential and the selection of the optimal technology suitable for achieving the project objectives. An optimal size of the project and the technology used depend very much on the demand potential. The optimal size & techno enable to achieve the economies of scale.

(i). Determination of project demand potential

Estimation of demand potential is the starting point of techno-economic analysis. The demand forecasting helps to firm up the qualitative parameters of the project. Demand forecasting involves the collection, compilation and interpretation of the large variety of statistical data.

(ii). Selection of optimal project strategy

At the stage of selection of the project strategy the project formulation team should have information about the project objective, project feasibility parameters and the project demand potential. The feasibility parameters & demand potentials jointly determine project feasibility. Project formulation in order to b realistic, has to identify all feasible course of action so as to evolve best strategy.

3. Project design and network analysis

Project design and network analysis are concerned primarily with the development of the detailed work plan and its time profile. The plan is presented in the form of network diagram. Network analysis is carried out to identify the optimal course of action, so as to execute the project within minimum time with available resources.

3.Input analysis
Input analysis is primarily concerned with the identification, quantification, and evaluation of the project inputs. The objective is first to identify the nature of the resources that a project will consume, secondly to estimate the magnitude of the requires resources and thirdly to evaluate the possibility of un-interrupted supply of inputs.

5.Financial analysis
The purpose of the financial analysis is to identify these characteristics and to determine the financial feasibility of the project. Such analysis involve estimates about project costs and revenue and the funds required for the project.

6. Cost benefit analysis

The purpose of this analysis would be to ascertain all social costs and secondary benefits with a view to find out the impact of the project on the society. The method of estimating the shadow prices or imputed prices, social discount rates etc are explained and the calculations are to b presented in separate statements or table.

Feasibility report
The details gathered from the feasibility studies and presented in various tables, reports and statements are consolidated into one master report called project report or feasibility report.