Analyzing Project Feasibility Premium Customer
For this paper, the writer will have to read the two post and react to them in one paragraph each. The
writer will expand and constructively challenge each of this postings using a minimum of one scholarly
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use . The writer will respond directly on the uploaded paper with the respond coming directly under each
posting as indicated. the references must be in APA format.
It is true that the effectiveness of any investment decision depends on the cash flows,
project life, and the discounting factor (Preda, 2009). Before the commencement of the project,
an immense understanding of the overall project is critical as this will help provide an economic
view whether the project is feasible or not. The time value of money will help assess the
ANAYLZING PROJECT FEASIBILITY PREMIUM 2
feasibility of the overall project by comparing the inflows and the outflows of the overall life
cycle of the project (Cornett, Adair, & Nofsinger, 2013). The cash flows consideration needs to
be done in combination with the overall life of the project in determining whether the benefits of
the project are sufficient to justify the current outlays. The combination of the payback period,
the net present value, and the internal rate of returns are significant in determining the feasibility
of the project.
The project with a positive net present value is feasible and has positive outcomes of the
investment. However, the shortcoming of the net present value is that is does not take care of
environmental factors that may also affect the outcome of the project (Cullen & Broadbent,
2012). In this regard, evaluating the capital project requires multiple analyses that also take care
of other factors such as environmental influences. In this regard, the optional situation
evaluations are good in assessing capital project feasibility as it will provide a clear
understanding of the potential of the project, in addition to providing an overview of how much
the organization is likely to lose in case the project fails. According to Hightower (2009), the use
of decision trees in analyzing the feasibility of the project is also useful as it gives provides the
management with the option of abandoning the project during implementation when the net
present value turns out to be negative.
References
Preda, A. (2009). Framing Finance: The Boundaries of Markets and Modern Capitalism.
University of Chicago Press
ANAYLZING PROJECT FEASIBILITY PREMIUM 3
Cornett, M., Adair, T., & Nofsinger, J. (2013). M:Finance. McGraw-Hill/Irwin; 2 edition
Cullen, J., & Broadbent, M. (2012). Managing Financial Resources (CMI Diploma in
Management Series). Routledge; 3 edition
Hightower, R. (2008). Internal Controls Procedures and Procedures. Wiley
