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    Project Feasibility Study

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    Shweta Shrivastava
    This document summarizes the key components of a project feasibility study and project report. It outlines that a project feasibility study involves generating project ideas, conducting initial screening and market, technical, financial, economic, and ecological analyses to determine if a project is worthwhile. If so, a funding proposal is prepared. A project report provides a comprehensive pre-investment study of all relevant economic, technical, financial, social, and managerial aspects of a proposed project to evaluate its socio-economic and technical viability. It includes details on location, costs, profitability projections, cash flows, and organization and management. The project report helps secure funding and ensures successful project implementation and evaluation.

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    Project Feasibility Study

    Uploaded by

    Shweta Shrivastava
    149 views19 pages
    This document summarizes the key components of a project feasibility study and project report. It outlines that a project feasibility study involves generating project ideas, conducting initial screening and market, technical, financial, economic, and ecological analyses to determine if a project is worthwhile. If so, a funding proposal is prepared. A project report provides a comprehensive pre-investment study of all relevant economic, technical, financial, social, and managerial aspects of a proposed project to evaluate its socio-economic and technical viability. It includes details on location, costs, profitability projections, cash flows, and organization and management. The project report helps secure funding and ensures successful project implementation and evaluation.

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    1349028_634661951554112500

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    This document summarizes the key components of a project feasibility study and project report. It outlines that a project feasibility study involves generating project ideas, conducting initial screening and market, technical, financial, economic, and ecological analyses to determine if a project is worthwhile. If so, a funding proposal is prepared. A project report provides a comprehensive pre-investment study of all relevant economic, technical, financial, social, and managerial aspects of a proposed project to evaluate its socio-economic and technical viability. It includes details on location, costs, profitability projections, cash flows, and organization and management. The project report helps secure funding and ensures successful project implementation and evaluation.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    149 views19 pages

    Project Feasibility Study

    Uploaded by

    Shweta Shrivastava
    This document summarizes the key components of a project feasibility study and project report. It outlines that a project feasibility study involves generating project ideas, conducting initial screening and market, technical, financial, economic, and ecological analyses to determine if a project is worthwhile. If so, a funding proposal is prepared. A project report provides a comprehensive pre-investment study of all relevant economic, technical, financial, social, and managerial aspects of a proposed project to evaluate its socio-economic and technical viability. It includes details on location, costs, profitability projections, cash flows, and organization and management. The project report helps secure funding and ensures successful project implementation and evaluation.

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    The key takeaways are that a project feasibility study involves generating ideas, conducting analyses like market analysis and technical analysis to determine if a project is worthwhile, and preparing a funding proposal if feasible.

    The steps involved in project feasibility analysis are: generation of ideas, initial screening, plan feasibility analysis including market analysis, technical analysis, financial analysis and economic/ecological analysis, and determining if the project is worthwhile by preparing a funding proposal or terminating the project.

    The factors considered in a technical analysis of a project include: availability of raw materials and inputs, suitability of the production process, appropriateness of equipment and machines, provision for auxiliary equipment and engineering works, treatment of effluents, layout of site/buildings/plant, and work schedule.

    PROJECT FEASIBILITY STUDY

    A project is a temporary and one-time endeavour


    undertaken to create a unique product or service,
    which brings about beneficial change or added value.

    Project planning refers to the plans of an undertaking


    to build up productive capacities or to diversify its
    business or to extend its existing capacities.

    Project management is the discipline of organizing


    and managing resources (e.g. people) in a way that
    the project is completed within defined scope,
    quality, time and cost constraints

    Generation of ideas
    SWOT analysis
    Clear articulation of objectives
    Cost reduction
    Productivity improvement
    Increase in capacity utilization
    Improvement in contribution margin
    Expansion into promising fields
    Fostering a conducive climate

    Generation of ideas
    Initial screening
    Is the idea prima facie promising?
    Yes

    NO

    Plan feasibility analysis

    Terminate

    Conduct market analysis

    Conduct technical analysis

    Conduct financial analysis

    Conduct Economic and Ecological analysis

    Is the project worthwhile?


    Yes

    Prepare funding proposal

    NO
    Terminate

    Scouting for project ideas


    Analyze the performance of existing industries
    Examine the input and output of various industries
    Review import and export
    Study plan outlay and government guidelines
    Look at suggestion of financial institutions
    Investigate local material and resources
    Analyse economic and social trend
    Study new technological developments
    Explore possibility of reviving sick units
    Identify unfulfilled psychological needs
    Attend trade fair

    .
    Preliminary Screening
    Compatibility with promoters
    Consistency with government priorities
    Availability of inputs
    Adequacy of market
    Reasonableness of cost
    Acceptability of risk level

    MARKET & DEMAND ANALYSIS

    Situational analysis and specification of objectives


    Collection of secondary information
    Conduct of market survey
    Characterization of the market- effective demand in
    the past and present, breakdown of demand, price,
    methods of distribution and sales promotion,
    government policy
    Demand forecasting
    Uncertainty in demand forecasting
    Market planning

    TECHNICAL ANALYSIS

    Whether the preliminary tests & studies have been


    done or provided for ?
    Whether the availability of raw materials,power &
    other inputs have been established?
    Whether the selected scale of operation is optimal?
    Whether the production process chosen is suitable?
    Whether the equipment & machines chosen are
    appropriate?
    Whether the auxiliary equipments & supplymentary
    engineering works have been provided for?
    Whether provision has been made for treatment of
    effluents?

    TECHNICAL ANALYSIS .

    Whether the proposed layout of site ,building &


    plant is sound?
    Whether work schedule has been realistically
    drawn up?
    Whether the technology proposed to be employed
    is appropriate from the social point of view?

    ENVIRONMENTAL ASPECT

    What are the types of effluents and emissions


    generated?
    What needs to be done for proper disposal of
    effluents and treatment of emissions?
    Will the project be able to secure all environmental
    clearance and comply with all statuary
    requirements?

    FINANCIAL ANALYSIS

    Investment outlay & cost of project


    Means of Financing
    Cost of Capital
    Projected profitability
    Break-Even Point
    Cashflows of Project
    Projected Financial position
    Level of Risk

    ECOLOGICAL ANALYSIS

    What is likely damaged caused by the project to the


    environment?
    What is the cost of restoration measures required
    to ensure that the damage to the environment is
    contained within acceptable limits?

    PROJECT REPORT

    A Project can be undertaken only on the basis of


    project report. Project report is pre-investment &
    comprehensive study of investment proposals of an
    organization which encompasses a thorough
    investigation relating to economic, technical, financial,
    social, managerial & commercial aspects.

    It seeks to evaluate the socio-economic & technical


    viability of a project before it is undertaken.

    A project report deals with the various aspects of a new


    project with reference to :

    Location of a project
    The size & capacity level.
    The technological aspects production process
    ,availability of raw material, requirements of labour &
    machines
    Management policies regarding organization &
    control aspects of a project.

    ADVANTAGES OF A PROJECT REPORT

    It lays down objectives in various spheres of


    business.
    It evaluates the objectives in the right perspective.
    It identifies constraints on resources Viz. manpower,
    equipment, financial & technological well in advance
    to make remedial measures in due course of time.
    It paves the way for management to seek financial
    accommodation from financial institution & banks.
    They require a detailed project report to evaluate
    project viability for raising funds from capital market.
    Successful implementation of a project depends upon
    the line of action as suggested in the project report.
    Besides,comparision of results will depend upon the
    projected profitability and cashflows ,production

    The foregoing discussion thus shows the


    necessity of preparing a project report in
    advance. It requires a team of specialized
    and technical experts to cover different
    aspects viz. financial, technical, commercial,
    socio-economic & government rules and
    regulation and also to follow a multidisciplinary approach to analyse the following
    factors

    CONTENTS OF A PROJECT REPORT

    Information about industry and its status in the


    economy, present production and demand pattern,
    indicating licensed, installs capacities, Government
    policies & export potential.

    Broad market trend of the product and by products


    within & outside the states for 5 years

    Raw material survey, giving specification and quality of


    raw materials required & their sources of availability.

    Production process broad description of different


    processes & their relative economies

    Availability of technical know-how within & outside

    CONTENTS OF A PROJECT REPORT

    Location of Plant , its advantages & justification.

    Water requirement of water for process ,boiler feed,


    cooling etc. Sources of water available & making it
    usable for factory & to townships

    Power total power requirements for the factory


    specification of power & choice between purchased
    power & generated power.

    Fuel-its requirement for steam raising or processing


    source and price at which it will be available for
    factory including taxes & surcharge.

    COST OF PROJECT ..SPECIFY FOREIGN EXCHANGE COST ,IF ANY

    Land inclusive of development expenditure to be


    incurred on land.
    Building to be erected for housing the plant &
    Machinery ,the administrative office, stores,
    services..Cost estimate to be included in the project
    cost.
    Plant & machinery including other equipments & their
    estimated cost.
    Offsite facilities, utilities & auxiliary facilities.
    Preliminary expenses (Share issue, stamp duty, cost
    of raising equity etc)
    Contingencies.
    Cost of Spare, repairs & maintenance during trial run
    & commissioning period.
    Pre-commissioning & commissioning period.

    Details of Capital Structure or financing mix-broad


    pattern to be indicated in report.
    Cost of Production-Project broad pattern for five
    years vis-a-vis design capacity. Break even point of
    production cost should be given, effect of variation of
    cost of raw material, utilities, selling price etc be
    indicated & elaborated. Price trend of raw material &
    finished goods be discussed.
    Profitability for five years after commission of the
    project should be worked out in the prescribed
    format.
    Cashflow statement & pay back period should be
    worked out for the project.
    Technical feasibility be discussed in detail with
    financing viability.
    Organisation & Management Description of
    corporate management ,promoters experience &
    background ,organizational chart, key personnel &

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