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Feasibility Study

Date post: 03-Mar-2016
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Feasibility Study

Feasibility StudyReporter: Santiago, Kathleen Joy M.Feasibility StudyTest the PROFITABILITY or NON-PROFITABILITY of a proposed product or businessRequires research to prove the projects market, technical and financial viabilityOutline in the preparation of a feasibility studyI. Project SummaryIntroductionName of ProponentName of business or enterpriseAddress of the business.Rationale of establishing the business in the areaSocio-economic benefits of the projectBrief Description of the ProjectNature of the FirmProduct or servicesProduct to be manufacturedDescribe briefly the physical properties of the products and its usesHighlights of the business with respect to quantity, quality, and the manufacturing cost of the end productAdvantageous modern techniques

Place of BusinessHead officeBranch location of intended business or project and exact location of the plantLocation mapsThe type and capacity of equipment or plant to be set up (if there is one)Kind, Purpose, Model, CapacityType of business and ownershipMajor AssumptionsMarketing AspectAnnual quantity of the productSelling PriceMarketing programTechnical AspectSelect manufacturing process, machinery capacity and design, machinery supplier, plant location, plant layout, structure and specifications, and materials and utilities specification and sourcesFinancial AspectEvaluate or estimate the future profitability, cash transactions, and financial condition of the projectDifferentiate the sets of such estimates based on varying assumptionsEconomic AspectBusiness should be socially acceptable and beneficialExecutional AspectProject Scheduling using the PERT-CPM and the Gantt ChartPERT-CPM chart is a project management tool used to schedule, organize, and coordinate tasks within a projectProject Evaluation Review Technique (PERT) a methodology developed by the US Navy in the 1950s to manage the Polaris submarine missile programCritical Path Method (CPM) developed for project management in the private sector at about the same time.Business financial scheme for the project, including the funding for personnel, and their compensation and benefits

II. Marketing AspectDemand Analysis scope of area to be served by business and annual production or consumptionSupply AnalysisProduction RequirementIII. Technical Aspect seeks to establish the workability or technical soundness of your business by interfacing the demand with available resources and technologyBusiness locationAdequacy of man power availability and power sourceProximity to market and raw materialsAccessibility to transportation and marketServices offeredBy-product End-productMachines and utilities and other alternative technical description of the projectAcquisition costEconomic life spanRated capacityFuel consumptionJustify the type of machine in the production process

Building structureType of support facilities and materials to be used in the constructionLayout/ floor planStockroom and other accessoriesManufacturing ProcessIllustrated through flowcharts and/or diagrams

Financial AspectShows the monetary status and financial viability of the enterprise through income, cash flows and balance sheet statements and interpretation of financial data. States as well the future financial condition and management of funds of the project and evaluate the projects future credit terms and modes of paymentTotal Project CostConsist of land, land improvements, buildings, machinery and equipment including installation cost and other cost, financial charges, working capital, etc.Source of financingOwners or stockholders equity and/ or loansFinancial projections for the next 5 to 10 yearsIncome statementCash flowBalance sheetSupporting schedules to financial projections and assumptions used

Financial analysis to showReturn on investment - (ROI) 15% - 20% ROI is considered viableBreak-even analysis


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