Economic feasibility studies for projects is one of the most important and influential factors when choosing a new investment project, as the main goal of the feasibility study is to study the possibility of establishing the project and achieving the maximum possible return from the available resources and achieving profits or returns exceeding the cost invested in it and reaching a final decision to accept or reject the idea:

Phases of the projects’ economic feasibility study:

A- Market study:

  • How important the project is to the market.
  • Defining the target groups.
  • Identify competitors.
    • Measuring the extent of market absorption of the product.
    • Study the supply and demand for the product.
    • A mini-study of the marketing methods used for the product and suggesting the most appropriate marketing methods to reach the targeted sales.

B- Technical study:

  • Study and selection of the project site.
  • Planning the production process and production stages.
  • Selection and characterization of production equipment.
  • Determine the operating cycle.
  • Study fixed and variable costs.
  • Estimating the investment costs required for the project.

C- Financial Study:

  • Study the revenues and proposed selling prices.
  • Making income statements and statements of future cash flows for the project.

D- Financial and Economic Indicators:

  • Analysis of profitability, liquidity and payback period.

E- Project evaluation:

  • General recommendations about the project from an economic and social point of view.