ACCOUNTANT’S ROLE IN PROJECT FEASIBILITY AND VIABILITY APPRAISAL STUDY WITH REFERENCE TO TANZANI
TABLE OF CONTENTS
Many new projects which have passed countless feasibility and viability appraisal studies have been sunk by unexpected events such as flood. fire, burglary, changes in legislation, plague, demographic shifts, an inability recruit and/or keep suitable staff, the failure of a major customer, seasonal demands, health scares, product recalls due to poor quality, withdrawal of financial support, weather, new technology and poor management to list but a few. Many projects of course can pass feasibility tests and studies and be brought undone by sheer incompetence or downright dishonesty. A key factor in any feasibility study must be ensuring that you are dealing with correct facts, correct assumptions and up to date financial data. Almost daily, Tanzanian Newspapers Larry prominent reports of new manufacturing ventures soon to be launched by individual or by local groups. Perhaps, tomorrow a state government will be telling us how college industries will stem the flow of youths from rural to urban areas. From the headlines alone Tanzanians cannot escape the feeling that the rest holds great promise for unprecedented economic and social progress. But these expectations will be fulfilled only if most of the specific projects survive their early lives. Besides, not all those new projects will be completed. Some that get completed will not prove profitable and may soon close down. According to Nwoko (1988:34) summits that in simple terms one reason for which new projects may not be completed but have to be abandoned or profitable ventures may get choked up by controllable environmental factors and circumstance is that proper feasibility analysis was not conducted before take –off of project. According to Ume 91977:10).. stated that proposals schemes or projects for social, environmental and economic development demand feasibility and viability appraisal. In fact the two fundamental questions which feasibility and viability appraisal seek to answer are inevitable for prudent decision making at all levels in the society. The entrepreneur must have a long range outlook on the intended business investment, examine the alternative uses of capital and account for inflation in future value of cash flows, and forecast future events and financial requirements and carry sensitivity and risk analysis. These are highly technical areas of knowledge that calls for expertise skills. Therefore this category of valuation holds out limitless opportunities and boundless scope for service and rewards for the accountants, economists, valuers or appraisers. This study provides an analysis and illustration of the principles of feasibility and viability appraisals and highlights the essence of the subject matter. It also brings into sharp focus the accountants essential contributions which have hitherto tended to be lost in wide diffusion
The study is divided into two sections. Section one which comprises chapter 1,2 and 3 deals with the main basis, scope and methodology of he research. Specifically, chapter two provides an evaluation of the theoretical concept of investment appraisal. Hence, the contributions of various writers with regard to the concepts of feasibility and viability studies as well as the role of the accountant there off are examined under the heading “literature review”. The second section comprises chapter 4 and 5, and focuses on feasibility and viability case study on a practical illustration of feasibility and viability case study of a household cassava-starch production.
Statement of the problem
One of the problems of a successful industrialization in the developing countries is undoubtedly lack of formulation of a project in such a way that its potential profitability either...
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