Feasibility Report

By
SHRINIVAS B. KOREWAR (ROLL
NO:5)
ABHIJEET B. BHOSALE(ROLL NO:14)

What is feasibility
study?
A feasibility study is an analysis of the viability of an
idea through a disciplined and documented process of
thinking through the idea from its logical beginning to its
logical end.
Feasibility study is carried out in order to assess the
viability of a new project
It is primary and most important thing in development of
a project

Reasons to Do a Study
Gives focus to the project.
Narrows the business alternatives.
Identifies new opportunities.
Identifies reasons not to proceed.
Provides valuable information for go/no go decision.
Increases probability of business success by identifying
weaknesses early.
Provides documentation that the idea was thoroughly
investigated.

Types of feasibility
Operational feasibility
1. Useful for identifying operational problems to be
solved, and their urgency
2. The PIECES framework
P-Performance ,I-Information, E-economy , C-control
E-efficiency ,I-Information, S-services

Types of feasibility
Market Feasibility
1. Determine facility needs.
2. Suitability of production technology.
3. Availability and suitable of site.
4. Raw materials.
5. Other inputs

Types of feasibility
Financial/Economic Feasibility
1. Estimate the total capital requirements.
2. Estimate equityandcredit needs.
3. Budget expected costs and returns
. Organizational/Managerial Feasibility
1. Business Structure
2. Business Founders
. Environmental feasibility
Environmental impact and their assessment

Types of feasibility
Legal feasibility
1. Is the project legally feasible?
2. Legal requirements.

Feasibility report
A feasibility report is the results of a feasibility study.
This report details whether or not a project should be
undertaken and the reasons for that decision.
Report Content
1.
2.
3.
4.
5.
6.
7.

Introduction/Executive Summary
Background
outline of project
Methodology/method of analysis
Overview of alternatives
Conclusion
Recommendation

Introduction/Executive summary
1. It state objective of the report and of the project
2. It should refer terms of references
3. Also it should state the constraints within which it has
been conducted
4. Executive summary:
This should concise summary of the major
recommendations of the report within 6 pages so
that it quickly understood by senior executive

Background

Some feasibility reports may require some

background discussion in order to make the rest of
the report meaningful to readers.

Describe your proposed plan in sufficient detail state

if it worked elsewhere and how it was implemented
Background on the Situation.For many feasibility
reports, you'll need to discuss the problem, need, or
opportunity that has brought about this report.

Outline of system
Outline of system involves description of project
List type and quality of product(s) or service(s) to be
marketed.

Outline the general business model (ie. how the

business will make money).

Include the technical processes, size, location, and kind

of inputs.

Specify the time horizon from the time the project is

initiated until it is up and running at capacity.

Methodology
It involves discussion on method of analysis for
feasibility study
Return on Investment (ROI) analysis
For comparing overall profitability
ROI = Estimated lifetime benefits - Estimated
lifetime costs
Estimated lifetime costs
or
ROI = Net Present value / Estimated lifetime costs

SWOT Analysis :STRENGTHS

WEAKNESS

MAINTAINING THESE
STREGTHS

OVERCOMING THESE
WEAKNESS

What can do for maintain these

strengths?

What should I do to overcome

these weakness?

OPPORTUNITIES

THREATS

TAKING ADVANTAGE OF THESE OVERCOMING THREATS

OPPORTUNITIES
What can I do to take the
advantage of these
opportunities?

What can i do to overcome these

threats?

Overview of alternatives
Possible alternatives
Sticking with the current system should always be
studied as one alternative
Different business processes for solving the problems
Different levels/types of computerization for the
solutions
Advantages and disadvantages of the alternatives
The major possible alternatives should be discussed and
compared using clearly defined criteria.

1. Estimate Equity and Credit Needs

Identify alternative equity sources and capital availability
Producers, Local Investors, Angel Investors, Venture
Capitalists
Identify and assess alternative credit sources.
Banks, Government (direct loans or loan guarantees),
Grants,
Local and State Economic Development Incentives.
Assess expected financing needs and alternative sources.
Interest Rates, Terms, Conditions, Etc.

2. Cost and benefits evaluation

It demonstrate how this proposal is feasible
It involves discussion technological feasibility, economic practicality,
social desirability, and ecological soundness

Examples of benefits

1. cost reductions
2. error reductions
3. increased throughput
4. increased flexibility of operation
5. improved operation
6. better (e.g., more accurate) and more timely information.

 Types of costs
Development costs purchasing cost, Installation cost,
operational cost

Conclusion
The conclusions section of a feasibility is the
restatement of the conclusions you have already
reached in the comparison sections. In this section, you
restate the individual conclusions, for example, which
model had the best price, which had the best battery
function, and so on.
It must untangle all the conflicting conclusions and
somehow reach thefinal conclusion, which is the one
that states which is the best choice

Recommendation

The final section of feasibility reports states the

recommendation.
The recommendation section should echo the most
important conclusions leading to the recommendation
and then state the recommendation emphatically.
the basis for that judgment has to be stated somewhere
in the requirements section.

Structure of feasibility report

xample of feasibility report on Wast

water system

Feasibility Report
Executive Summary
Includes
principal / salient features of technical, financial
and
administrative aspects of the project

Introduction
project genesis how idea of project originated?
- whether fits in development plan?
organization of study
scope and status of report

 Project area and need for the project(background)

Project area
geographic, topographic, climatic, religious, cultural

descriptions
Population pattern
estimation and analyze growth rate
estimate probable density of population
Economic and Social conditions
present living standards of various groups
identification of locations according to income levels
housing conditions
data on education, literacy, unemployment etc.

 Available water resources

adequacy of surface and ground water w.r.t quantity and
quality
development of water resources
pollution problems
Existing water supply system
details (source, capacity, area served, hours of supply,

number of connections, rate etc.) of existing system

Existing drainage and solid waste systems
Need for a project
improvement, expansion
new
deficiencies of existing system

 Proposed project (water supply scheme outline)

Details of the project

rehabilitation of the existing facility
construction of new facility
alternative designs
selection of sources
alternative layouts of rising mains
alternative sites of WTP & ESRs
training schemes for O & M
consultancy services needed

Components of project
thoroughly described with necessary topo- maps
location maps
technical information
engg. design & drawings

 Implementation schedule (CPM/PERT)

Cost Estimates
capital investment (for all components)
recurring cost (annual)
Impact on the environment
Institutional responsibilities (Identification of
organizations)
approval
funding
implementation
O&M

Financial plan
Source of fund
Interest on loan
Recurring expenses
Annual burden

Conclusion
Summary of findings and results of FR
Review of need
Recommended alternative scope, coverage and components
Capital cost and tentative financing plan
Urgency for implementation

Recommendation
Specify all action for completion
Mention of detailed investigation, data collection and
operational studies

Thank you