Economic Feasibility Studies – Sarsson Accounting Services

SAS | Economic Feasibility Studies

Companies keep on investing in new projects or initiatives for expansion and growth. However, investment of time and resources is not the first step. The first step is a thorough analysis of the prospective project to understand if it is viable or not. Amongst the various feasibility studies, checking the practicality of a project from the perspective of costs incurred and monetary benefits achieved is a critical analysis and an important one. Such a study improves the trustworthiness of a project, thereby enabling companies to determine the positive commercial benefits that the proposed project will produce.

We, at SAS, help our client companies by conducting such economic feasibility studies and assisting them in capital budgeting decisions.

We help the companies to remove each layer of complexity involved in their project’s feasibility study. We enable them to meet the requirements and expectations of investors and stakeholders when looking to establish a new project or initiative. In a way, we aid the company in building a business case to convince its investors that the project is worth investing, obtain funding approval for the project and prove that it should be prioritized over others.

Objectives Of Economic Feasibilities Study

An economic feasibility study is undertaken for making the following decisions:
Investment decision| Financing decision| Dividend decision.

This activity allows our clients to have a clear understand if the project will generate an acceptable return on investment (ROI) to cover the cost of capital and consider the risks associated with the project. It’s also to check if the net present value (NPV) remains positive if one discounts the cash flows by the desired rate of return.

Our Services: Economic Feasibility Studies

Analysis of the cost and expenses for implementation of the project and undertake a financial feasibility study
Analysis of the potential risks that may impact the project and conduct a business feasibility study and provide a business feasibility report
Financial budgeting and planning for the project
Defining the critical success factors for each stage of the project for its gradual completion
Identification of the capabilities of the company that can facilitate the project
Finding the weaknesses of the company that require external sourcing or internal development
Profiling of other stakeholders involved in the project
Understanding of the company’s perspectives of growth and clear definition for the same to facilitate measurement of the results
Developing the model for economic feasibility study and projections for future including calculation of NPV, payback period, discounted payback period, Average accounting return (AAR), Internal Rate of Return (IRR), and Profitability Index (PI)
Providing alternative models or approaches that may prove to be easier in implementation and more value-generating for the company
A deep examination of the alternatives for comparison purposes
Assessment of the impact of the project on all the stakeholders and interest groups
Consideration of the timeline for decision making and execution
Recommendations for the project’s feasibility and the best approach for its execution

Economic Feasibility Studies Methodology:

Meeting with stakeholders
Identification of goals and objectives of the study
Understanding of target market and competition
Projection of current and future costs and revenues
Projection of current and future cashflows
Risk assessment
Issuance of economic feasibility study report

Key Differentiators

Our team provides the required market knowledge of the relevant sector to help the client company and its management in assessing the value generated from their investment made in the project and thus determine its economic feasibility.
Our team provides an independent assessment of the project based on their knowledge, capability, and experience of handling projects of different industry sectors and employing the global best practices
Our team of dedicated and committed professionals conducts an overall analysis of the projects’ strengths, weaknesses, and validity of assumptions based on the identification of its financial and non-financial costs and benefits.
SAS render a well-written business feasibility report based on the economic feasibility analysis of the project so that the company is enabled to assess the costs, benefits, and viability before finalizing and allocating the financial resources.