Presentation On Project Appraisal by Financial Institution: Presented By, Pawan Kumar Singh Geeta K. S

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Presentation on Project Appraisal by Financial Institution

Presented by, PAWAN KUMAR SINGH GEETA K. S.

Meaning of Project Appraisal: Appraisal means Assessment and estimation. Project define as: Non routine Non repetitive undertaking. Involves number of uncertainties. Definite period of time. ( starts to end ). Project appraisal is a process whereby a leading financial institution makes an independent and objective assessment of the various aspects of an investment proposition for arriving at a financial decision and is aimed at determining the viability of the project

Factors Considered while Appraising a Project :-

Technical Factors Financial Factors Economic Factors Commercial Factors Managerial Factors

Technical analysis
Product mix Capacity Location & site Raw material & consumables Machinery & equipments

Market analysis
Sales Experience Method : Sample market is surveyed before the new product is offered for sale. The results of the market surveyed are then projected to the universe in order to anticipate the total demand for the product. Vicarious method : The consumers of the product are not approached directly but indirectly through some dealers who have a feel of their customers.

Complete Enumeration method : All probable customers of the product are approached and their probable demands for the product are estimated and then summed. Sample Survey : Some number of consumers out of their total population is approached and data on their probable demands for the product during the forecast period are collected and summed. The total demand of sample customers is finally blown up to generate the total demand for the product.

Economic Analysis
Requirement of raw materials, Level of capacity utilization, Anticipated sales, Anticipated expenses and the probable profits, Location of the enterprise.

Financial Analysis
Investment outlay Cost of capital BEP Level of risk Profitability

Managerial Appraisal
In order to judge the managerial capability of the promoters, the following questions are raised: 1.How resourceful are the promoters? 2. How sound is the understanding of the project by the promoters? 3.How committed are the promoters?

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