Feasibility studies are carried out to assess ideas and new projects and determine the viability of the proposed projects. This provides in-depth insights into the proposed venture, identifying critical elements required for success, anticipating the expected performance of the project, assessing the overall financing requirements and the expected investment returns from the project.
Feasibility studies also prevent bad investment decisions from being taken in situations where the study concludes that the projects are not considered viable and hence potentially saving significant investment amounts that could have been written off had the project been initiated without proper assessment and resulted in a failure.
The critical components that are considered in feasibilities are shown in the diagram below:
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