Distinguish between the following: Technical and financial viability of a project

The primary aim to carry out technical analysis is to check the technical viability of the project. A project is evaluated on the following parameters to judge its technical viability. Feasibility of selected technical processes and its suitability under given technological conditions prevailing in a country. Location of the project. Plant layout. Machinery and other equipments with their specifications. Availability of raw material. Power and other inputs. Appropriateness of technology chosen from social point of view. Availability of infrastructure for the project. Techno economic assumptions and parameters used for analyzing costs and benefits viability provision for treatment of effluents. Training of manpower. Legal requirement on documentation, license and registration. Financial Viability The primary aim of financial analysis is to determine whether the project satisfies the investment criteria of generating acceptable level of profitability. The project should be able to service the debt and ensure expected returns to the investor. Cash flow statement is the basis for financial analysis. The important aspects which are examined while conducting financial appraisal are: Investment outlay. Means of financing. Projected financial statements. Viability and profitability. Break-even point analysis. Sensitivity analysis. Risk analysis.