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Market analysis Technical analysis Financial analysis Economic Analysis Ecological Analysis
Market Analysis
Aggregate demand in future Market share? For the above 2 questions we require Consumption trend past/present Production possibilities and constraints Imports and exports Cost structure Elasticity of demand Consumer behavior, intentions, attitudes, preferences and requirements Distribution channels and marketing policies in use Administrative , technical and legal constraints
Technical Analysis
Preliminary tests and studies and provided for? Raw material, power and other inputs tied up? Scale of operation optimal? Chooses prodn process suitable? Equipment and machinery suitable? Treatment of affluents? Layout, plan sound? Work schedules realisitic? Technology is appropriate in societal view?
Financial Analys
Investment outlay and cost of project Means of financing Cost of Capital Projected profitability Break-even point Cash flows of project Investment worthwhileness Projected financial position Level of risk
Economic analysis
Direct economic benefit and costs ? Impact of the distribution of income in society? Impact on savings and investment in society? Contribution towards self sufficiency? Employment and social order?
Ecological Analysis
Damage caused by project to environemnt? Cost of restoration within acceptable limits?
Market Analysis
Market Share Technical Viability Technical Analysis Sensible Choices
Financial Analysis
Return Benefits and cost in shadow price Other Impacts
Economic Analysis
Key Issues
Major investment decisions:
Risks DCF Value Financing Impact on Short term EPS Options : DCF do not capture the value of the project and does not reflect the value options embedded.
option to delay Option to expand Change inputs or outputs Option to contract or abandon