Abstract

Every year Dun and Bradstreet publishes reports of business failures, and new venture prospects frequently appear discouraging. Why do 16 out of 17 companies fail to survive? Perhaps, because many of them should never have been started and might not have been if a comprehensive feasibility analysis had been made. PROJECT FEASIBILITY ANALYSIS is a manual for the preparation of a new venture feasibility study and investment proposal. Its organized, step-by-step presentation assists in venture idea generation and explains in detail how to • Perform the market analysis (data needs, sources of data, market surveys, forecasting methods, development of the sales plan) • Conduct the technical analysis (production schedule, equipment and tooling, labor needs, plant location and layout, cost estimating, development of the manufacturing plan) • Direct a financial analysis (cost estimating, pro-forma financial statements, profitability measures, sensitivity analysis) The authors also present a feasibility study for a thermo-mechanical pulp mill as a case example and follow up with the concepts of social profitability, in- cluding cost/benefit analysis. Readers also find sound advice on financing considerations, sources of financing, and the investment proposal. This book meets the needs of Entrepreneurs: Assures thoroughness in evaluating the financial feasibility of a venture idea before becoming too committed. Procedures presented here result in an objective analysis and a well-documented proposal. The Business Executive: Provides details related to expansion possibility (addition to product line or a new plant, for example) and advice on financing. Industrial Development Professionals: Illustrates how to analyze investment alternatives regarding characteristics involving generation of employment, support of existing or planned industry, upgrading of employment opportunities, or the amount of foreign exchange saved. The Loan Officer and Investment Decision Maker: Gives useful guidelines for those who have to appraise investment proposals and pass judgement on their commercial worthiness.

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