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Describe economic feasibility analysis of a project

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It examines a proposed project in terms of its net contribution to the economy and to the society.
It answers question like:-
• Will the projects planned economic outputs adequately serve the intended propose?
• Is the project responsive to an agent present or anticipated economic or social needs?
• Will the service proposed to be performed by the project be adequate and will the benefits justify the costs?
It especially important for public projects e.g. roads construction, bridges, fewer supply, water, and health.
It looks at variables like:-
i) Demand and supply of all projects outputs
ii) projects ability to increase employment with ?multiplier? affects on increased purchases of goods and services
Its effect on increasing public sector revenue its use of locally available resources
in cooperate projects, the owners will be interested in the financial return of the project.
Upon completion its possible to asses the net contribution to the economic and social welfare of the community. Its done via a comparison of the social and economic benefits against the costs of construction and operation of the project.
Cost-benefit analysis is normally done for each technical alternative
There is therefore need to approximate the costs and benefits expected from the projects for each of the projects years.
Costs include capital expenditure, labour, materials, equipment, quality control, maintenance, vehicle operation etc.
Benefits include serving in transport costs, people, labour, stimulation of new economic growth, new industries, how housing, and shopping facilities, reductions in accidents, and other tangible and intangible benefits quantified to the extent possible.
Include quantifiable and non quantifiable costs and benefits.
How do we quantify reductions in accidents, people?

Titany answered the question on November 15, 2021 at 07:35

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