The economic feasibility study is one of the three branches of the feasibility study, as any feasibility study consists of a marketing feasibility study, a technical feasibility study and an economic feasibility study, and this is our discussion in this article, the third branch, the economic feasibility study.
economic feasibility study
It is a study based on the analysis of several investment operations or decisions in order to facilitate the process of choosing between the offered and available alternatives, and it is also intended as a study prepared to judge an investment project by the extent of its success or failure through financial data, operational costs and revenues throughout the period of operation or production.
Advantages of the study
It is the economic study that is used to analyze the data to reach the results, if they are negative or positive, before the start of the project, to determine the decision to implement or cancel it and to avoid the possible consequences that may occur, and one of its best features is to avoid wasting the money used before and during the operation process.
The importance of the economic feasibility study
The feasibility study is the one that shows whether this project is economically successful or not, and it is the one that provides opportunities for the owner of the project and has the reference that he can use at any stage of production, and it also provides opportunities in the process of identifying various sources of financing, and it gives a picture A complete project for the project in terms of its efficiency and achieving the required objectives.
Objectives of the study
It is the one that provides the alternative and available opportunities before and during the operation or production process.
It is based on determining the factors that affect the production process through the effect of those factors on the demand for the product or service.
It is responsible for deciding whether or not the project is economically viable.
It is responsible for determining the size of the profits, through the expectation of selling and thus the expectation of profits.
It assists the entrepreneur in calculating costs by presenting and integrating operating costs, establishment costs, and all expenses.
What is the amount of money to start the project, will the project need an external financier, how are the products priced, what are the sales volume, and other questions that you find answers to in the economic feasibility study.
The elements of a feasibility study is a study carried out by an investor with the aim of setting up a project to invest his capital. This study explains to the owner of the capital returning from the establishment of the project through feasibility, which includes many elements that show all the details of the cost of establishing the project and all the expenses before, during and after The production process in addition to knowing the profits and then making it easier for the entrepreneur to take the decision to go ahead with the project or cancel it.