what is a project feasibility report

8/12/2019 What is a Project Feasibility Report

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PROJECTFEASIBILITY

REPORT


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Definition

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Written document pertaining to any investmentproposal

Contains all relevant data, on the basis of whichthe project has been appraise

Enables entrepreneurs to know the inputs

required

Serves as a road map to reach the destination

determined by the entrepreneurs


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Importance of Feasibility Report

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Determines the potential of the market

Insight into whether the product is required in themarket or not

Formulating price strategies

Assess the economic viability


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Format Of Project Feasibility

Report

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Introduction

Objective of the project

Rationale and scope of the project

Review of industries related to the product

Technical Feasibility

Description of the product

Product specifications


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Mechanical, chemical and physical properties of the

product

Use of the product

Manufacturing process(mention flow charts)

Alternative manufacturing process

Justification for adoption of selected process

Plant size


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Production schedule(expected volume for a given point oftime)

Selection of machinery and equipments (mentionspecifications, its origin, total cost, terms of payment)

Plant location(mention distance frm raw material and

market)

Plant layout

Cost of the erection of proposed building and landimprovements

Study of availability of raw material and utilities


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Estimate of labour requirement and supervision required

Type and quality of waste to be disposed with thedescription of waste disposal method, its cost and

necessary clearance required from the proper authorities

Components to be purchased from outside (No. andspecifications)

Installed capacity

Power estimation (H.P / K.W)

Estimate of production cost of product


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Market Feasibility

Market description

Methods of transportation

Existing rates of transportation

Channels of distribution

General trade practices

Analysis of past and present demands


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Quantity value of consumption

Major consumers of the product

Analysis of past and present supplies

Competitive position of the product (selling price)

Quality and marketing practices of competitors


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Financial Analysis

Fixed capital(land , machinery , equipments tools,office equipments, recurring and non recurring exp)

Working capital(staff and labor salaries, raw

material , other exp including rent, power,advertisement, taxes)

Statement of total projected cost

Initial capital requirements

Cost of production per year


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Cash flow statement

Total investment(fixed and working capital)

Balance sheet

Assumptions(collection period of sales , inventorylevels, payment period and expenses,

administrative and financial exp. )

Financial analysis (showing return on investment,return on equity, break even volume and price

analysis)


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Conclusion

Overview of the various activities and outcomes

Summary

A brief statement that presents the main points in

a concise form.

Including expected schedule of commencement

of production / activity)

Bibliography


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what is a project feasibility report

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