2. PROJECT APPRAISAL
Project appraisal is the process of examining the various
dimensions of a project be it technical, financial, social,
Environment etc. and providing an assessment of the projects
likelihood for success and its viability.
It evaluates a project’s ability to meet its stated objectives and to
provide long term Economic growth in the larger framework of
local and National needs.
KEY OBJECTIVES -
• Assessment of a project in terms of its economic, social and financial viability
• Decide to Accept or reject a Project
• It is a tool to check the viability of a Project Proposal
4. MARKET APPRAISAL
It is one of the major areas of introducing of any
products in market . In that case , must be considered
these things before launching in a market:
• What would be the aggregate demand of the proposed
product or service?
• What would be the market share of the project under
appraisal?
5. MARKET APPRAISAL
Market appraisal (Issues)
• Past and current demand trends
• Past and current supply position
• Production possibilities and constraints
• Imports and exports
• Nature of competition
• Cost structure
• Elasticity of demand
• Consumer behaviour
motivation, attitudes, preferences, requirements
• Distribution channels
• marketing policies
6. TECHNICAL APPRAISAL
Technical analysis of a project is concerned primarily with:
1.Material input and utility
• Raw material
• Processed industrial material/components
• Auxiliary material and factory supplies
• Utilities
2.Manufacturing process/technology
• Plant capacity
• Material inputs
• Production cost
• Production mix
• Technological obsolescence
• Ease of adoption
7. TECHNICAL APPRAISAL
3.Product mix
4.Plant capacity
• Feasible normal capacity
• Nominal maximum capacity
5.Location and site
6.Machinery and equipment
• Plant equipment
• Mechanical equipment
• Electrical equipment
• Spare part and tools
10. Environmental appraisal
Major projects that causes environmental
damage:
• Power plants
• Irrigation schemes
Industries like leather processing, chemicals
etc.
Likely damage & the cost of restoration
11. ECONOMIC APPRAISAL
Economic analysis of Appraisal helps to justify the
benefits of the project vs cost to produce the
product.
This will also help to check the following benefits
the project:
• Better output
• Better services
• Better employment
• Better revenue
• Better earnings
• Better standards
• Better income
• Better distribution
12. FINANCIAL APPRAISAL
In order to adjudge the financial viability of the
project, the following aspects need to be
carefully analysed:
• Assessment of the financial requirements both –
fixed capital and working capital need to be
properly made.
• Optimum ratio between current assets and current
liability
1. Is the return on our investment going to be adequate?
2. How can we raise the investment money?
13. FINANCIAL APPRAISAL
3.Break even point
4.Cash flows in the project
5.Investment worthwhile ?
• Net present value
• Internal rate of return
• Pay back period
6. Level of risk
14. Conclusion
A project feasibility report includes:
• Market and demand analysis
• Technical analysis
• Financial analysis
• Socio economic analysis
• Ecological analysis
This analysis helps the decision maker in making
the right choice of the project.