1-Introduction To Project Appraisal
1-Introduction To Project Appraisal
1-Introduction To Project Appraisal
Importance
Long – term effects
Irreversibility
Substantial outlays
Difficulties
Measurement problems
Uncertainty
Temporal spread
Types of Investments
Mandatory Investments
Replacement investments
Expansion investments
Diversification investments
R & D investments
Miscellaneous investments
Capital Budgeting Process
Planning
Analysis
Selection
Financing
Implementation
Review
Levels of Decision Making
Where is the decision taken Lower level Middle level Top level
management management management
Potential Market
Market Analysis
Market Share
Technical Viability
Technical Analysis
Sensible Choices
Risk
Financial Analysis
Return
Benefits and Costs in Shadow
Economic Analysis Prices
Other Impacts
Environmental Damage
Ecological Analysis
Restoration Measures
Feasibility Study : A Schematic Diagram
P Generation of Ideas
r
e
l
Initial Screening
i
m
i
Is the Idea Prima Facie Promising
n Yes No
a
r Plan Feasibility Analysis
y Terminate
W
Conduct Market Analysis Conduct Technical Analysis
o
r
k
Conduct Financial Analysis
E
A
v
n
a Conduct Economic and Ecological Analysis
a
l
l
u
y Is the Project Worthwhile ?
a
s
t Yes No
i
i
s
o Prepare Funding Proposal Terminate
n
Basic Considerations : Risk and Return
Investment
Return
decisions
Market value
of the firm
Financing
Risk
decisions