The stages of an economic feasibility study
Market study
How important the project is to the market.
Defining the target segments.
Identifying competitors.
Measuring how much of the product the market can absorb.
Analysing supply and demand for the product.
A short review of how the product is currently marketed, with recommendations on the best channels to reach the target sales.
Technical study
Assessing and selecting the project site.
Planning the production process and its stages.
Selecting and specifying production equipment.
Defining the operating cycle.
Analysing fixed and variable costs.
Estimating the investment the project requires.
Financial study
Revenue analysis and proposed selling prices.
Projected income statements and cash-flow statements for the project.
Financial and economic indicators
Profitability, liquidity and payback-period analysis.
Project evaluation
Overall recommendations on the project from an economic and social standpoint.