Feasibility Studies - Preparation, Analysis and Evaluation

Introduction

This course is designed for:
Anyone involved in preparing, writing and analysing feasibility studies.

Objectives

– Prepare and analyse feasibility studies.
– Recognise vital arguments and effectively handle the various assumptions.
– Show ideas in a plain, effective, convincing and objective manner.
– Develop the feasibility study financial model using Microsoft Excel.
– Prepare scenario and sensitivity analysis to enhance plans and projections.
– Analyse someone else’s feasibility study and find its advantages and shortcomings.

Course Outline

Day 1

Introduction and Definitions

– Feasibility Study Definitions.
– Feasibility Study Objectives.
– Feasibility Study versus Business Plan.
– Feasibility Study Cycle.
– Feasibility Study Preparation Steps.

Day 2

Feasibility Study Elements

– Feasibility Study Report Elements.
– Executive Summary.
– Feasibility Study Outline.

– Market Feasibility:

o Market Research and Analysis.
o Market Research Data Types.
o Sales Projections Analysis.

– Technical Feasibility:

o Critical Technical Questions.
o Supply Feasibility.
o Operational Feasibility.

– Financial Feasibility:

o Project Costs.
o Indirect Costs.
o Ongoing Costs.

Day 3

Feasibility Study Financial Model Using Microsoft Excel

– Building the Feasibility Study Financial Model.
– Weighted Average Cost of Capital (WACC).
– Cost of Equity Using the Capital Asset Pricing Model (CAPM).
– Unlevered Free Cash Flow (UFCF).
– Terminal Value of the Project.
– Preparing Sensitivity Tables.
– Creating Different Scenario Analysis.

Day 4

Feasibility Study Appraisal and Analysis

– Financial Analysis Parameters

o Liquidity Ratios.
o Operating Ratios.
o Financial Leverage Ratios.
o Security Ratios.
o Profitability Ratios.

– Investment Appraisal Analysis

o Quantity and Sales Breakeven Points.
o Payback Period.
o Net Present Value (NPV).
o Internal Rate of Return (IRR).
o Profitability Index.

Day 5

Feasibility Study Evaluation and Implementation

– Internal Recommendations and Conclusions.
– Evaluating Feasibility Studies.
– Common Mistakes in Using the Feasibility Study Results.
– Implementing the Proposals.