Project Feasibility Study

Dean JEFFREY P. FRANCO, CPA, MBA

Instructor

What is a Project Feasibility Study?A project feasibility study is a preliminary study undertaken to determine and to document a project’s viability. The result of this study are used to make a decision whether to proceed with the project or not. Although it does not guarantee financial success, it attempts to reduce the risk of the investment, thereby reducing the waste of valuable resources.

A project feasibility study is a systematic inquiry to determine whether a specific business undertaking could be implemented (if viable) at a certain acceptable profit level (or degree). It is also a plan or a framework on how the operation of a business project shall be accomplished.

What is a Project Feasibility Study?

Another meaning…Project Feasibility Study is an analysis of possible alternative solutions to a problem and a recommendation on the alternative.

But PFS should not be…

too voluminous and filled with too theoretical proposals. They must be real and practical.

First Step: Needs Analysis

Basic Questions – Is there a need for the project? What are the reasons why the study was carried out?

Parts of a Project Feasibility StudyThe PRELIMINARY SECTION

• Title Page (with standard format)

• Approval Sheet (with standard format)

• Preface

• Acknowledgements

• Table of Contents

• List of Tables (if any)

• List of Figures (if any)

• List of Annexes (if any)

Parts of a Project Feasibility Study

The MAIN BODY of the REPORT

• The Executive Summary

• Project Background and History

• Marketing Feasibility

• Technical Feasibility

• Management Feasibility

The MAIN BODY of the REPORT

• Financial Feasibility

• Socio-economic Feasibility

• Findings, Conclusions and Recommendations

• Project Implementation and Timetable

Parts of a Project Feasibility StudyThe REFERENCE SECTION

• Bibliography

• Appendix

• Index (if any)

The Executive Summary

• Highlights (Project Background, Reasons Why the Study is Carried Out, Summary of Feasibility)

• Conclusions and Recommendations to Feasibility (Advantages of Implementing your Project)

The Marketing Feasibility

• Market Description (Target Market)

• Supply and Demand Analysis (at least for the last 6 years)

• Proposed Marketing Program (Strategies)

• Projected Sales

The Technical Feasibility

• Detailed Description of the Product or Service

• Production Process (through a diagram)

• Vicinity Map

• Project Location/ Layout

• Floor Plan/ Blueprint

• List of Materials, Utilities & Equipment Needed

• Waste & Waste Disposal Method

• Other Technical Requirements

• Total Production Cost

The Management Feasibility

• List of Administrative Personnel

• Organizational Chart

• Salaries and Benefits

• Management Style (forms of management)

• Job Analysis, Descriptions (duties & responsibilities) and Specifications (requirements)

• Related Labor Laws

• Personnel Development Program

The Financial Feasibility

• Total Project Cost (Initial & Working Capital Requirements)

• Pre-operating Costs

• Financial Assumptions (Sales & Collections, Depreciation, Tax Computations, Arbitrary Rates)

• 5-year Projected Financial Statements

• Financial Statement Analysis (profitability, payback period, break-even analysis, etc)

The Socio-economic Feasibility

• Benefits received by your employees

• Tax payments to the government

• Environmental and community benefits

Timetable

• Use of Gantt Chart

Please read… for your reference ONLY• Feasibility Study Handbook by Eustaquio Ditablan

• A Business Planning Manual by Jorge Cuyugan

• Feasibility Studies from the College Library

• Other Feasibility Studies from other schools within Nueva Ecija

• Internet Research on Feasibility Studies

Thank you

Dean JEFFREY P. FRANCO, CPA, MBA

Instructor

BSBA IV – HRDM

• Bag Pack Hub

• Yema Cake

• Restaurant

• Information Kiosk

• Umbrella w/ Curtain

• Laundry shop

• Sports Center

• Siomai

• Ice cream bar

• Massage parlor

• Medicinal plants

• Chesa Flour

• Coffee shop

• Vendo Machine*

• Rooftop improvement

• Rice Coffee

BSBA IV – FM/MM

• Kesong Puti

• Vendo Machine*

• Microfinance

• Agricultural Supplies

• Financial Advisory Services

• Flavored Rice

• Poultry (pugo)

• Cupcake Bibingka

• Vegetable powder juice

• Papaya Jam

• Rice mill

• On-line enrolment

• Rice cake (variety)

• On-line water refill

List of FS Advisers

• Mrs. Luzviminda Guinto

• Mrs. Chona Matias

• Mrs. Marciana Espinosa

• Ms. Lorelie Alarcon

• Mrs. Cindy Cruz

• Ms. Karla Monsale

• Mr. Bryan Barlis

• Ms. Ernalyn Cariaga

• Mr. Lyndon Rayos

• Mr. Allan Reyes

• Mr. Khriz Fernandez

• Ms. Joy Padilla

Estimated FS Costs/Expenses

• Adviser – P600

• English Critic – P300 (pay directly to English Critic)

• Panelists (3) – P200

• Professionals – depending on the PF (optional)

• FS photocopy – depending on the volume/quantity

• Incidental expenses during oral defense