evaluationl english 2

7/28/2019 Evaluationl English 2

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Chapter (2)

The stages of project feasibility study

The stages of project feasibility

study

There are five stages as the

following:


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1- Pre feasibility study

1-The first stage of cycle begin with idea orsuggestion from investor or a group ofpersons or institution for investment ofmoney

2-This idea begins from observation orsupervision of the markets or experiencesof the other people in the similar pastprojects.


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3-If there is a decrease in a certain

agricultural goods as vegetable or fruit orin industrial agricultural goods as cheese or

dairy products from observation of supply

or demand or relevant data.

4-It is possible to reach the local demand

size or exports size and to determine thegap between supply and demand.


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5-Then studying supply of economic

resources and its availability 6-Then determining the general

characteristics for the invested ideathrough pre feasibility study andmaking decision either continuing orstop about making detailed feasibilitystudy


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2- Detailed feasibility study

Include different studies:

1-Marketing feasibility study

2-Technical and technologicalfeasibility study

3-Environmental feasibility study

4-Economic feasibility study 5-Financialfeasibility stud

6-Finance feasibility study


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(1) Marketing feasibility study

-Marketing feasibility study is a group of studies

and researches related to the current market

-in which the marketing information and data are

available which allow the prediction of size andsale values from determinate products and certain

projects through future period.

-The first and started point in detailed feasibility

study for projects.


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The major objective of this point is

represented by the following

1- Identification of goods and

services in which size, type shapequality andpackaging

2- Determining nature of the

market either internal or external


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3-Identification of the actual consumers in

which sex number, age, income category ,culture,educational, occupational composition, norms,

traditions and degree of their of responds to

technological variables 4-Studying the current supply and available

substitution and degree of competition

5- Determining size and value of the expectedand current sales and proportion of the sales of

the products for the projects.


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Developing countries are not concerned with

marketing feasibility study because it required:

1- High cost capital

2- Require specific scientific

experiences

3- Require more accurate information

and data

4- Ignoring planning and

implementation of the projects


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(3) Environmental feasibility study:

Concerns with evaluation of the project thateffect on the environment whether ispositive or negative and may cause damage

to environment and such evaluation aims todecrease such negative effects and increasethe positive one.

This evaluation needs considerableknowledge about the environmentallegislations and plans.


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(4) Economical feasibility study:

After the technical feasibility study, the

available data and technical marketing

information will be translated in theform of investment costs and operating

costs.

1- Investment costs which include allexpenditure of the working project

preparation and implementation it

consists of


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(A) Visible fixed investment

Includes all costs paid on capital and

long term visible financial preparation

and includes the following costs: 1- Land and its preparation costs.

2-Building and utilities costs

3- All equipment, machines, and tools

costs include (buying, taxes, &

preparation costs).


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5- Establishment costs, offices preparation

costs, & furniture costs needed for offices &buildings.

6- Emergency contingent & price which is a

certain percentage of the fixed costs as anamount of money used to face any

emergency during the execution stages or to

face any increase in prices during execution

stages.

7- Animal costs (if the project involves

animal production)


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(B) Invisible (hidden) fixed costs:

This includes long term investment costs &includes the following:

1- The costs of the pre feasibility study.

2- The costs of the detailed feasibility study

3- Advertisement & advertising costs. 4-Traveling costs.

5- Labor training costs during preparation &establishment.

6- Knowledge right cost & trade name costs.

7- Long term loan benefit which paid duringpreparation and establishment.


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2- Production and operating costs consist of:

Fixed costs:

It is cost not relevant to production amount,

but related to certain period of time as landand building renting costs and salaries.


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Variable costs:

It is costs that related to project

amount, as it increases or decrease,

such production costs are animalsfeeding costs, seeds, fertilizers, raw

material, electricity, water, energy,

And packaging costs.


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Thank You

evaluationl english 2

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