Self Studies in Finance

INTRODUCTION:

Projects are the cutting edge of development. Projects are an investment activity in which financial resources are expended to create capital assets that produce benefits over an extended period of time. I UNIDO defines a project as a proposal for an investment to create and develop certain facilities in order to increase the production of goods/services in a community during a certain period of time.

The Chartered Management Institute define a project as "an activity that has a beginning and an end which is carried out to achieve a particular purpose to a set quality within given time constraints and cost limits". A project may be defined as an activity for which money will be spent in an expectation of returns and which logically seems to lend itself to planning financing and implementation as a unit. It is the smallest operational element prepared and implemented as a separate entity in a national plan of programmes of development.

A project is also defined as a proposal for an investment to create, expand and develop certain facilities in order to increase the production of goods and services in a community during a certain period of time. Furthermore, for evaluation purposes, a project is a unit of investment, which can be distinguished technically, commercially and economically from other investments.

Definition:

Systematic and comprehensive review of the economic, environmental, financial, social, technical and other such aspects of a project to determine if it will meet its objectives.

Project Appraisal:

Project appraisal is the process by which financial institution makes an independent and objective assessment of various aspects of the project for arriving at the financial decision. There are four broad aspects of appraisal.

(1) Financial Feasibility:

The data base required for financial feasibility analysis can be grouped as under:...