Feasibility Study Analysis

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Questions and Answers

What is a key purpose of financial projections in a project summary?

To present a concise overview of the project (correct)

To outline employee training programs

To list all project expenses in detail

To provide a detailed marketing plan

Which of the following are considered areas of focus in the provided project summary?

Operations and Sales

Marketing and Operations

Finance and Human Resources

Marketing and Finance (correct)

What section of the project summary describes how the project intends to achieve its goals?

Long-Range Objectives (correct)

Feasibility Criteria

Highlights of the Project

Description Definition of the Project

What does the project summary NOT typically include?

Marketing Analysis Signup and view all the answers

Which component provides an overview of the project's expected outcomes?

Summary of Findings and Conclusions Signup and view all the answers

What is meant by 'low-hanging fruit' in the context of project strategy?

Identifying easily attainable opportunities Signup and view all the answers

Which aspect is not commonly summarized in a project's highlights?

Financial risks involved Signup and view all the answers

What important information is usually included in the project's description definition?

General goals and functionalities of the project Signup and view all the answers

What type of data is derived from direct surveys, expert opinions, and trend or correlation analysis?

Primary Data Signup and view all the answers

Which of the following is NOT mentioned as a method of gathering primary data?

Focus Groups Signup and view all the answers

What is a key difficulty associated with benefits and costs evaluation in financing arrangements?

They can be intangible or hidden. Signup and view all the answers

What should managers ensure in terms of operational feasibility?

The current operational mode is sufficient. Signup and view all the answers

Which of the following is a component of the projected income statement?

Projecting spending and sales Signup and view all the answers

What is a potential consideration for the projected income statement?

Costs related to salary and materials Signup and view all the answers

What must be assessed regarding governmental regulations during a feasibility study?

Their influence on local and national systems Signup and view all the answers

Which of the following questions is relevant to assessing organizational feasibility?

What are the manpower problems the system will face? Signup and view all the answers

What aspect does the long-range objectives section of a project typically address?

Expected achievements in terms of size and role in the industry Signup and view all the answers

Which criterion is evaluated under technical feasibility?

Availability of production resources Signup and view all the answers

Why is financial feasibility important in project evaluation?

It assesses the profitability and cash flow of the project Signup and view all the answers

What element is part of socio-economic feasibility assessment?

Project's general benefit to society Signup and view all the answers

What does the management feasibility assessment evaluate?

The compatibility of management structure with project needs Signup and view all the answers

Which of the following is a key focus when discussing the history of a project?

The reasons for the project's inception Signup and view all the answers

What information is likely included in the project timetable and status section?

The duration until the project becomes operational Signup and view all the answers

How is the nature of the industry explored in a feasibility study?

By reviewing demand-supply dynamics and industry challenges Signup and view all the answers

What should be included in a financial plan concerning personnel?

Proposed number of personnel Signup and view all the answers

Which of the following is NOT part of the projected financial statements?

Total Production Costs Signup and view all the answers

What should a management proposal include?

Management style definition Signup and view all the answers

Which element is essential in projecting cash flow?

Total Cash Inflow Signup and view all the answers

In job analysis, what is primarily studied?

Operations and responsibilities of a job Signup and view all the answers

What should be included in the breakdown of projected production costs?

Beginning and ending inventories Signup and view all the answers

Which policy is crucial for personnel development?

Training and staff development programs Signup and view all the answers

What aspect should a financial plan detail concerning working capital?

Working capital needs for specified months Signup and view all the answers

What should be included in the supply situation of intended products?

Projected supply for the next five months Signup and view all the answers

What aspect should be addressed when discussing raw materials requirements?

A detailed breakdown of raw materials needed Signup and view all the answers

Why are product substitutes important to consider in a feasibility study?

They can affect consumer purchasing decisions Signup and view all the answers

When assessing local production capacities, what should be estimated?

The total supply from future competitors Signup and view all the answers

What is a critical component of the project's utilities requirement?

A breakdown of utilities needed Signup and view all the answers

What should be described regarding waste and waste disposal methods?

All wastes produced and their disposal methods Signup and view all the answers

What is an important aspect when presenting quality control measures?

Workflow diagrams for production processes Signup and view all the answers

What is meant by 'Job classification' in a feasibility study?

Grouping jobs based on work type or duties Signup and view all the answers

Study Notes

Feasibility Study: Primary Data Sources

Market surveys, expert opinions (Delphi method), trend and correlation analyses, and fad analysis are key primary data sources.
Difficulties in assessing financing arrangements (rent, lease, purchase) stem from intangible benefits and costs.
Multi-criteria alternatives must be ranked when evaluating financing.

Feasibility Study: Secondary Data Sources

Trade associations, research companies, industry experts, government/non-government agencies, digital intelligence platforms, company reports, academic journals, public libraries, and competitor websites offer valuable secondary data.

Feasibility Study: Operational Feasibility

Assesses the current operational mode's capacity to handle increased workload and information flow.
Evaluates benefits, cost reductions, system utilization post-development, and potential manpower issues.
Considers labor objections, organizational policies, conflicts, governmental regulations, legal risks (fraud, data breaches), and existing fraud/data breach safeguards.

Projected Income Statement

Project spending and sales (salaries, rent, materials, marketing) are projected.
Financial projections (cash flow) are created using expenses and revenues.

Project Summary Content

Highlights project details (definition, objectives, feasibility, history, conclusions).
Provides a concise overview for analysts and financiers.
Includes: enterprise name, location, project description, long-range objectives, feasibility criteria, project highlights, major assumptions, findings, and conclusions.
Explains the choice of enterprise name.

Long-Range Objectives and Feasibility Criteria

Define ten-year goals (size, capacity, volume, worth, industry role, economic impact).
Detail guidelines used to assess project feasibility (profitability, socio-economic impact).

Feasibility Study Areas of Focus

Marketing: Develop strategies to maintain competitiveness and capitalize on opportunities.
Finance: Secure funding and commence operations. A timeline is given with key milestones.

Project Timeline

October 2024: Apply for permits and order equipment/licenses.
November 2024: Assemble teams.
December 2024: Commence operations.

Feasibility Study: Technical Feasibility

Describes the product line, required technology, its availability, resource mix, and optimum production volume.

Feasibility Study: Financial Feasibility

Presents an overall financial view, covering operating cash requirements, profitability, and cash flow.

Feasibility Study: Socio-Economic Feasibility

Assesses the project's societal, regional, and national economic impacts.
Determines its overall societal benefit and alignment with economic development programs.
Describes the industry, its product lines, demand-supply situation, history, growth, challenges, potential, and economic role.

Feasibility Study: Management Feasibility

Defines the management structure, its suitability, salary scales, and compatibility with industry standards.

Project Development and Management

Supply situation of products is presented, with projections for the next five months.
Local production capacities and competitor capacities are considered to estimate total supply.
Importations by other companies are also a supply source.
Cheaper product substitutes are discussed and their impact on consumer choices is analyzed.

Production Process, Location, and Resources

Includes proposed product drawing(s).
Production process diagrams or workflows are key.
Quality control and inventory control measures are presented.
The proposed location is described in detail with scaled layout drawings.
A detailed list of equipment and tools is required.
A breakdown of required utilities is presented.
A detailed breakdown of raw materials requirements is needed.

Waste and Waste Disposal

All project waste, its effects, disposal methods, and associated costs are described.

Organization and Management Plan

Number of personnel, organizational chart, job requirements, specifications, responsibilities, functions, salary, and benefits are detailed.
Management style, general policies, and staff development programs are defined.
Job analysis and job classification are integral elements.

Financial Plan

Major financial assumptions (sales, collections, depreciation, taxes, inventories, profit division) are stated.
Shows sources of financing.
Includes projected financial statements (project costs, property & equipment, working capital, contingency).
Includes projected cash flow statement.
Includes projected income statement and balance sheet.

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Description

This quiz covers the essential components of a feasibility study, including primary and secondary data sources, operational feasibility, and financial assessments. Test your understanding of how various data sources contribute to making informed business decisions.