Professional Documents
Culture Documents
Technical Appraisal
Commercial Appraisal
Economic Appraisal Financial Appraisal Management Appraisal
This involves a critical study of the following aspects: Selection of process/technology Raw materials Technical know-how Collaboration agreements Product mix Selection and procurement of plant and machinery Plant lay out Location of the project Project scheduling and implementation
some product or service and to market the to the consumers and earning a profit thereby. The commercial appraisal occupies a prime place in project appraisal. The commercial appraisal (market appraisal) is concerned with market for the product or service.
angles:
Demand for the product
Supply position for the product Distribution channels
decisions.
It consists of two major areas. They are given below: Arriving at the total cost of the project . arriving at the appropriate means of financing the
categories:
1. Non-Discounted Cash flow techniques: Pay back period method:-
cash outlay of the project/annual cash in flow Accounting rate of return (ARR) method:average annual profit/net investment in the project*100
PV of cash inflows Initial cash outflow Benefit Cost Ratio(BCR) method: PV of cash inflows PV of cash outflows
Management is the most important factor that can either make a project
a success or failure. A good project at the hands of a poor management may fail , while a not-so-good project at the hands of an effective management may succeed. Banks and financial institutions that lend money for financing projects lay more emphasis on management appraisal.
Matters to be appraised:Integrity Foresightedness Leadership qualities Interpersonal relationship, Technical and financial skills, Commitment