Feasibility of a project

Project appraisal methods help in selection of the most profitable project. After a list of projects is made, a blue print of each project is prepared with regard to the details of requirements, such as buildings, plant and machinery, raw materials labour etc. with their prices and expected capacity utilization over time coupled with prices of products. Each project is then examined with respect of feasibility. The manager should assess:

-        the technical feasibility in terms of availability of land, plant and machinery, raw materials, technology and so on,

-        financial feasibility of a project with respect to finances available,

-        economic feasibility, in terms of employment generation and development of backward areas, and

-        management feasibility with regard to availability of managerial personnel for implementation and running of the project.

The feasible projects are then appraised in terms of their economic viability. First the cash flows from each project are calculated and then a comparison is made with the help of project appraisal measures. 

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