SCOPE OF FEASIBILITY ANALYSIS

Scope of Feasibility Analysis. In general terms, the element of a feasibility analysis for a project should cover the following items :

1.  Need Analysis. This indicates a recognition of a need for the project.


The need may affect the organization itself, another organization, the public, or the government. A preliminary study is then conducted to confirm and evaluate the need. A proposal of how the need may be satisfied is then made. pertinent questions that should be asked include :

• Is the need significant enough to justify the proposed project ?


• Will the need still exist by the time the project is completed ?


• What are the alternate means of satisfying the need ?


• What are the economic. social, environmental, and political impacts of the need ?

2. Process Work. This is the preliminary analysis done determine what

will be required to satisfy the need. The work may be performed by a consultant who is an expert in the project field. The preliminary study often involves system models or prototypes. For technology – oriented project, artist’s conception and scaled – down models may be used for illustrating the general characteristics of a process. A simulation of the proposed system can be carried out to predict the outcome before the actual project starts.

3. Engineering and Design. This involves a detailed study of the proposed project. Written quotations are obtained from suppliers and subcontractors as needed. Technology capabilities are evaluated as needed. Product design, if needed, should be done at this stage.

4. Cost Estimate. This involves estimating project cost to an acceptable level of accuracy. Levels of around – 5% to + 15% are common at this level of a project plan. Both the initial and operating costs are included in the cost estimation. Estimates of capital investment and of recurring and nonrecurring costs should also be contained in the cost estimate document. Sensitivity analysis can be carried out on the estimated cost values to see how sensitive the project plan is to the estimated cost values.

5. Financial Analysis. This involves an analysis of the cash flow profile of the project. The analysis should consider rates of return, inflation, sources of capital, payback periods, breakeven point, residual values, and sensitivity.



This is a capital analysis since it determines whether or not and when funds will be available to the project. The project cash flow profile helps to support the economic and financial feasibility of the project. The project cash flow profile helps to support the economic and financial feasibility of the project.

6. Project Impacts. This portion of the feasibility study provides an assessment of the impact of the proposed project. Environmental, social, cultural, political, and economic impacts may be some of the factors that will determine how a project is perceived by the public. The value added potential of the project should also be assessed. A value added tax may be assessed based on the price of product and the cost of the raw material used in making the product. The tax so collected may  be viewed as a contribution to government coffers.

7. Conclusions and Recommendations. The feasibility study should end with the overall outcome of the project analysis. This may indicate an endorsement or disapproval of the project. Recommendations on what should be done should be include in this section of the feasibility study report.



Market Study : A study of the market  variables which influences the supply of and demand for real estate ( this is broadest possible form of analysis and it encompasses all other  of demand oriented real estate studies )










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Marketability Study : A narrowly defined study to determine the

conditions under which a specific property can be sold.

The key conclusions relate to both price and time required to sell.

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A Feasibility Study : A study to determine the probability

that a specific real estate proposal will meet the objectives

of the developer and or investor.

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Highest and Best uses study : A study to determine

that use among other possible and legal alternatives

uses which result in the higher land value for a

specific site.