Feasibility Study of any investment under the following heads:
(A) Market Feasibility: The market feasibility study for a product already selling in the market consists of:
(a) Economic Indicators
(b) Demand Estimation
(c) End-user profile
(d) Influencing Factors
(e) Market Potential
(f) Infrastructure Facility
(g) Demand Forecasting
(h) Supply Estimation
(i) Identification of Critical Success Factors
(j) Estimation of the Demand-Supply Gap
(B) Technical Feasibility: The commercial side of technical details has to be studied along with the technical aspects such as plant location, raw material, utilities, technology availability, etc so that commercial viability of the technology can be evaluated.
(C) Financial Feasibility: Financial feasibility study requires detailed financial analysis based on certain assumptions, workings and calculations. Following are the two aspects:
(i) Risk Assessment: Basic indicators of financial viability use profit and cash flow estimates subject to risk or uncertainty. Evaluation of risk is necessary through the adoption of various analysis.
(ii) Financial Projections: In assessing the financial viability of a project it is necessary to look at the forecasts of financial condition and flows viz.
• Projected balance sheet
• Projected cash flow statement
• Combined multi year projections
Post Completion Audit:
• Evaluates actual performance with projected performance verifying both revenues and costs
• Offers various advantages such as decision making, identifying abilities, discovering biases, inducing healthy cautions and serving useful training grounds.
• Most neglected aspect of capital budgeting due to difficulty in isolating the individual investments cash flows from whole financial accounts.
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