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Facets of Project Analysis

1. Market analysis, technical analysis, financial analysis, economic analysis, and ecological analysis are the key facets of project appraisal tests conducted as part of a feasibility study. Market analysis examines demand and market share, technical analysis considers choices of technology, scale, and resources, and financial analysis evaluates costs, profits, and investment worthiness. 2. Economic analysis takes a broader social perspective, considering impacts on income distribution, savings, employment, and other social goals. Ecological analysis assesses environmental damage and restoration costs for projects with significant ecological effects. 3. The feasibility study uses a schematic process beginning with idea generation, initial screening, conducting the various analyses, and determining whether to proceed with funding or

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2K views4 pages

Facets of Project Analysis

1. Market analysis, technical analysis, financial analysis, economic analysis, and ecological analysis are the key facets of project appraisal tests conducted as part of a feasibility study. Market analysis examines demand and market share, technical analysis considers choices of technology, scale, and resources, and financial analysis evaluates costs, profits, and investment worthiness. 2. Economic analysis takes a broader social perspective, considering impacts on income distribution, savings, employment, and other social goals. Ecological analysis assesses environmental damage and restoration costs for projects with significant ecological effects. 3. The feasibility study uses a schematic process beginning with idea generation, initial screening, conducting the various analyses, and determining whether to proceed with funding or

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FEASIBILITY FACTORS & APPRAISAL TESTS FOR PROJECT IDEAS & BUSINESS

VENTURES
Some major points to e !ept in min" #or $ritin% PROJECT C&ARTER' BUSINESS CASE
JUSTIFICATION' PROJECT FRA(E)OR*+,
Start with the written presentation of your own bad idea
Support the bad idea with the set of pre-conditions, presumptions & constraints considered
Convert your own bad idea into Business Opportunity
Support the conversion with the help of conducting appraisal tests & factorial analysis under the
Feasibility Study Model ! Schematic "iagram
Can highlight the integrities of the pro#ect with the help of S$O%, &'S%, S%&, '%O& !nalysis etc(
!lso re)uired to frame &*s of Mar+eting, &romotional Strategies & %arget !udience
Additional efforts would be definitely credited
Fa-ets o# Proje-t Ana./sis 0PROJECT APPRAISAL TESTS1
!( Mar+et !nalysis ,M!-.'% !&&-!/S!0 %'S%1
B( %echnical !nalysis ,%'C23/C!04%'C23O0O5/C!0 !&&-!/S!0 %'S%1
C( Financial !nalysis ,F/3!3C/!0 !&&-!/S!0 %'S%1
"( 'conomic !nalysis ,'CO3OM/C !&&-!/S!0 %'S%, basically SCB!1
'( 'cological !nalysis ,'CO0O5/C!04'36/-O3M'3%!045'O5-!&2/C!0 !&&-!/S!0 %'S%1
Fa-toria. Ana./sis 0OT&ER FACTORS INTER)OVEN IN PROJECT APPRAISAL TESTS1
7( 0egal factors
8( Cultural factors
9( 'thical factors
:( &olitical factors
;( 2uman aspects & 3on-human aspects ,-esource matri<4 input-output transactional matri<1
A. (ar!et Ana./sis- Mar+et !nalysis is concerned primarily with two )uestions
7( $hat would be the aggregate demand for the proposed product4service in the future=
1
8( $hat would be the mar+et share of the pro#ect under appraisal=
%o answer the above )uestions, the mar+et analyst re)uires a wide variety of information and appropriate
forecasting methods( %he +inds of information re)uired are
Consumption trends in the past and the present consumption level
&ast and present supply position
&roduction possibilities and constraints
/mports and e<ports
Structure of competition
Cost structure
'lasticity of demand
Consumer behaviour, intentions, motivations, attitudes, preferences, and re)uirements
"istribution channels and mar+eting policies in use
!dministrative, technical, and legal constraints
A2 Te-3ni-a. Ana./sis- !nalysis of the technical and engineering aspects of a pro#ect needs to be done
continually when a pro#ect is formulated( %echnical analysis see+s to determine whether the
prere)uisites for the successful commissioning of the pro#ect have been considered and reasonably
good choices have been made with respect to location, si>e, process, etc( %he important )uestions
raised in technical analysis are
$hether the preliminary tests and studies have been done or provided for=
$hether the availability of raw materials, power, and other inputs has been established=
$hether the selected scale of operation is optimal=
$hether the production process chosen is suitable=
$hether the e)uipment and machines chosen are appropriate=
$hether the au<iliary e)uipments and supplementary engineering wor+s have been provided for=
$hether provision has been made for the treatment of effluents=
$hether the proposed layout of the site, buildings, and plant is sound=
$hether wor+ schedules have been realistically drawn up=
$hether the technology proposed to be employed is appropriate from the social point of view=
B2 Finan-ia. Ana./sis ? Financial !nalysis see+s to ascertain whether the proposed pro#ect will be
financially viable in the sense of being able to meet the burden of servicing debt and whether the
proposed pro#ect will satisfy the return e<pectations of those who provide the capital( %he aspects
which have to be loo+ed into while conducting financial analysis
/nvestment outlay and cost of pro#ect
Means of financing
Cost of capital
&ro#ected profitability
Brea+-even point
/nvestment worthiness #udged in terms of various criteria of merit
&ro#ected financial position
0evel of ris+
2
C2 E-onomi- Ana./sis- 'conomic !nalysis, also referred to as social cost benefit analysis ,SCB!1, is
concerned with #udging a pro#ect from the larger social point of view( /n such an evaluation the focus
is on the social costs and benefits of a pro#ect which may often be different from monetary costs and
benefits( %he )uestions sought to be answered in social cost benefit analysis are
$hat are the direct economic benefits and costs of the pro#ect when measured in terms of shadow
,efficiency1 prices and not in terms of mar+et prices=
$hat would be the impact of the pro#ect on the distribution of income in the society=
$hat would be the impact of the pro#ect on the level of savings and investment in the society=
$hat would be the contribution of the pro#ect towards the fulfillment of certain merit wants li+e self-
sufficiency, employment, and social order=
D2 E-o.o%i-a. Ana./sis- /n recent years, environmental concerns have assumed a great deal of
significance- and rightly so( 'cological analysis should be done particularly for ma#or pro#ects which
have significant ecological implications ,li+e power plants and irrigation schemes1 and environment-
polluting industries ,li+e bul+ drugs, chemicals, and leather processing1( %he +ey )uestions raised in
ecological analysis are
$hat is the li+ely damage caused by the pro#ect to the environment=
$hat is the cost of restoration measures re)uired to ensure that the damage to the environment is
contained within acceptable limits=
*e/ Iss4es in Proje-t Ana./sis
(ar!et Ana./sis
Te-3ni-a. Ana./sis
Finan-ia. Ana./sis
E-onomi- Ana./sis
E-o.o%i-a. Ana./sis
Feasii.it/ St4"/+ A S-3emati- Dia%ram
3
Potential
market
Sensible
Choices
Technical
Viability
Benefts and Costs in
Shadow Prices
Other
Impacts
Return
Risk
Enironmental
dama!e
Restoration
"easures
"arket
Share
$e have e<amined the +ey facets of pro#ect analysis( %he feasibility study is concerned with planning,
analysis, selection ,evaluation1, and financing, and involves mar+et, technical, financial, economic, and
ecological analysis( %he schematic diagram of the feasibility study is shown under
(Prof. Sheena Manchanda)
4
5eneration o# I"eas
Initia. S-reenin%
Is t3e I"ea Prima Fa-ie Promisin%6
P.an Feasii.it/ Ana./sis
Con"4-t (ar!et
Ana./sis
Con"4-t Te-3ni-a.
Ana./sis
Con"4-t Finan-ia. Ana./sis
Con"4-t E-onomi- an" E-o.o%i-a. Ana./sis
Is t3e Proje-t )ort3$3i.e6
Prepare F4n"in% Proposa.
Terminate
Terminate
#es
#es
$o
$o

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