The feasibility study severs as the starting point for appraisal. Al the aspects of feasibility are carefully revisited
- Technical Appraisal: Alternative technical solutions, processes, engineering and design requirements, technical specifications, technical risks and uncertainties, local resource availability, size, scale of operations, layout, location and geology are summarized and assessed.
- Economic Appraisal: Economic assessment is in terms of worth of the project to the society. The costs and benefits of the project are assessed and summarized. The criteria used for assessment are:
- Comparison of benefits and costs
- Cost-benefit ratio
- Internal Rate of Return (IRR)
- Net Present Value (NPV)
- Marketing Appraisal: Factors such as project capacity, market demand, market coverage, demand forecast, estimated revenue, marketing programme, competition and ability to satisfy customers are summarized and assessed.
- Management Appraisal: Important features of project organization and management, institutional relationships, management capacities and limitations and impact of stakeholders on the project are summarized and assessed.
- Environmental Appraisal: The positive and adverse environmental impacts of the project are summarized and assessed.
- Financial Appraisal: Factors such as capital requirements, sources of funds, projected cash flow, profitability, and the project's capacity to meet financial obligations are summarized and assessed. Sensitivity analysis is done to test the effects of changes in variables such as cost, price and time on the project's ability to achieve objective. Ratio analysis is done to assess liquidity and profitability. The effect of inflation is assessed.
