Project Feasibility & Time Value of Money
Anjum Asim Shahid Rahman Chartered Accountants. Member firm of Grant Thornton International
Project Concept Scope of work Market Assessment
Investors Benefit
SWOT Analysis Financial Analysis Way Forward
Project Feasibility
A decision making toll to do or forgo a project. It
includes:
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Justification of Project Need
Viability/do ability of a project
Financial & Economic Analysis
Risks identification and mitigation
Option Analysis
Anjum
Anjum Asim
AsimShahid
Shahid Rahman
RahmanChartered
CharteredAccountants.
Accountants.Member
Memberfirm
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GrantThornton
ThorntonInternational
International
Project Concept Scope of work Market Assessment
Investors Benefit
SWOT Analysis Financial Analysis Way Forward
Project Feasibility - Justification of Project Need
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Demand & Supply Gap
Better Quality or increased efficiency
Cost Reduction
Strategic objective
Regulatory Requirement
Anjum
Anjum Asim
AsimShahid
Shahid Rahman
RahmanChartered
CharteredAccountants.
Accountants.Member
Memberfirm
firmof
ofGrant
GrantThornton
ThorntonInternational
International
Project Concept Scope of work Market Assessment
Investors Benefit
SWOT Analysis Financial Analysis Way Forward
Project Feasibility - Viability/do ability of a Project
Project feasibility access project viability from following
perspectives :
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Legal
Technical
Financial
Environmental
Social
Anjum
Anjum Asim
AsimShahid
Shahid Rahman
RahmanChartered
CharteredAccountants.
Accountants.Member
Memberfirm
firmof
ofGrant
GrantThornton
ThorntonInternational
International
Project Concept Scope of work Market Assessment
Investors Benefit
SWOT Analysis Financial Analysis Way Forward
Project Feasibility - Financial & Economic Analysis
Financial Analysis is investors perspective and includes
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Determining Investment Requirement
Bankability of Project
Opportunity Cost
Estimation of Required Return
Projections of Expected Return
Economic analysis measures overall benefit to economy
and is normally from government perspective for
prioritizing a project.
Anjum
Anjum Asim
AsimShahid
Shahid Rahman
RahmanChartered
CharteredAccountants.
Accountants.Member
Memberfirm
firmof
ofGrant
GrantThornton
ThorntonInternational
International
Project Concept Scope of work Market Assessment
Investors Benefit
SWOT Analysis Financial Analysis Way Forward
Project Feasibility-Risk Identification & Mitigation Plan
Normal Project Risks
 Cost overrun
 Time overrun
 Performance Risk
 Natural Hazards
 Demand Risk
 Economic Risks
 Government Support
Mitigation plan involves structuring project so as to pass
through maximum possible risks
Anjum
Anjum Asim
AsimShahid
Shahid Rahman
RahmanChartered
CharteredAccountants.
Accountants.Member
Memberfirm
firmof
ofGrant
GrantThornton
ThorntonInternational
International
Project Concept Scope of work Market Assessment
Investors Benefit
SWOT Analysis Financial Analysis Way Forward
Infrastructure Projects & Feasibility
 High Capital Costs
 Long duration of projects
 No easy exits
Anjum
Anjum Asim
AsimShahid
Shahid Rahman
RahmanChartered
CharteredAccountants.
Accountants.Member
Memberfirm
firmof
ofGrant
GrantThornton
ThorntonInternational
International
Project Concept Scope of work Market Assessment
Investors Benefit
SWOT Analysis Financial Analysis Way Forward
Time Value of Money
This is about perceived value of time and is so
different for different people /groups
It is based on concept of equal purchasing parity over
different time periods.
Normally it is defined as “Interest Cost”
Anjum
Anjum Asim
AsimShahid
Shahid Rahman
RahmanChartered
CharteredAccountants.
Accountants.Member
Memberfirm
firmof
ofGrant
GrantThornton
ThorntonInternational
International
Project Concept Scope of work Market Assessment
Investors Benefit
SWOT Analysis Financial Analysis Way Forward
Time Value of Money- Infrastructure Projects
Cost of delaying a project
100 Billion -------> 150 Billion (50 Billion)
In addition there are other costs including Poor
quality of life for delayed period and other economic
losses.
Anjum
Anjum Asim
AsimShahid
Shahid Rahman
RahmanChartered
CharteredAccountants.
Accountants.Member
Memberfirm
firmof
ofGrant
GrantThornton
ThorntonInternational
International
Project Concept Scope of work Market Assessment
Investors Benefit
SWOT Analysis Financial Analysis Way Forward
TVM – Project Prioritization Toll
limited availability of capital requires prioritization of
projects.
Different projects may have different cash flow
patterns over the project life .
TVM equates cash flows of each project in present
value terms .All else equal, the project with highest
NPV should be taken first
Anjum
Anjum Asim
AsimShahid
Shahid Rahman
RahmanChartered
CharteredAccountants.
Accountants.Member
Memberfirm
firmof
ofGrant
GrantThornton
ThorntonInternational
International
Project Concept Scope of work Market Assessment
Investors Benefit
SWOT Analysis Financial Analysis Way Forward
Thank you
Anjum
Anjum Asim
AsimShahid
Shahid Rahman
RahmanChartered
CharteredAccountants.
Accountants.Member
Memberfirm
firmof
ofGrant
GrantThornton
ThorntonInternational
International