Concept of Project Appraisal
Project appraisal is a generic term that refers to the process of assessing, in a structured way, the case for proceeding with a project or proposal. In short, project appraisal is the effort of calculating a project's viability.[1] It often involves comparing various options, using economic appraisal or some other decision analysis technique. Or in other terms it is Systematic and comprehensive review of the economic, environmental, financial, social, technical and other such aspects of a project to determine if it will meet its objectives.
Project appraisal is a structured, systematic and a comprehensive process to assess the financial, economic, social, environmental and technical viability of a project. The quality of the project appraisal is the main determinant of success of a project. As per the experience of the World Bank, poorly appraised projects have seven times more probability of failure within three years of their implementation as compared to well appraised projects. As all projects compete for scarce resources, good quality investment appraisal of projects, quantification of risks of different stakeholders and well laid out strategies to manage risks expedite financial closure and timely completion of projects. In the developing economies, the infrastructure sectors such as Power, Roads and Highways, Telecommunications, Ports, Airports, Water Supply, Irrigation and Shipping, Railways and Sewerage systems require large investments. Adoption of sound project appraisal methodologies expedites investment in these sectors which are crucial for economic growth.
In the banker perspective a structured analytical tool to take a credit decision, the basic premises of an appraisal are to assess and analyze the promoters, viability of the business macro & micro environment of the business, business financials various risk and its mitigations, permission and approval form regulatory bodies,
http://www.businessdictionary.com/definition/project-appraisal.html#ixzz2IgVunkDs [
You May Also Find These Documents Helpful
-
During the evaluation process an assessment is made on cost, efficiency, programs outcome, programs impact, program implementation, design, and program logic. A reflection of the project scope takes place during the evaluation process where a comparison between what was needed and what was provided is examined. An impact evaluation measures whether the project has achieved its intended outcomes. Cost effectiveness analysis assesses the efficiency of a project. During the evaluation, an outline of the benefits and cost of the program will be reviewed for comparison. Throughout the life cycle of the project, the project team will collect lessons learned. While the project is in cycle, the team members will record both good and bad lessons learned. In essence, the team will record new events that occurred within the life cycle of the project. This type of evaluation will both strengthen individual team members and the project team. The evaluation process will include both internal and external evaluations. The internal evaluation will be done by the project manager. The project manager will have a better overall knowledge of the program and also possess informal knowledge of the program. The project manager is already familiar with the project staff allowing the evaluation process to be less threatening. Finally having the project manager perform the team evaluation is cost effective. The…
- 3705 Words
- 15 Pages
Powerful Essays -
The consideration of costs and benefits in the evaluation of an upcoming city project is a rather logical process. In fact, it is important for city managers to take into account the project costs and benefits prior to implementation of said project. The process of developing the project idea is essential and thus consideration for the best course of action becomes essential to the process. Once these measures have been weighed out it is critical to compare the costs associated with implementing the courses of action addressed in the development phase.…
- 1074 Words
- 5 Pages
Good Essays -
To be able to analyze the project, we need to calculate the project’s NPV, IRR, MIRR, Payback Period, and Profitability Index.…
- 991 Words
- 4 Pages
Good Essays -
I met my grandson for the first time on May 10, 2007. I was standing there in the examining room looking at the monitor screen and looking at my grandson. I could see him moving from side to side and up and down. It was the most marvelous thing anyone can witness in his or her lifetime.…
- 573 Words
- 3 Pages
Good Essays -
Ranking projects simply through the inspection of cash flows is inadequate due to the time value of money and cost of capital of companies; the only piece of information that can be derived from looking at the cash flows is the amount of time it would take to be paid back (regular payback period). There are several capital budgeting tools that can be used, including IRR, MIRR, and NPV. These three can be used to see if a project exceeds the expected rate of return or the cost of capital for a company. We also refer to payback, discounted payback period, and a profitability index to help assist the decision-making process for which projects should start to commence. In addition, qualitative factors must be considered for any project given outside of this case, to cover the bases and have successful…
- 1367 Words
- 8 Pages
Powerful Essays -
Second, establish the criteria for an ideal system. Consider the needs of the four stakeholder groups of any appraisal system: Appraisers who must evaluate performance; Appraises whose performance is being assessed; Human Resources professionals who must administer the system; and the Senior Management group that must lead the organization into the future. Further, Identifying their expectations at the start helps assure their support once the system is finally designed. Furthermore, ask each group: "What will it take for you to consider this system a smashing success?"…
- 1319 Words
- 6 Pages
Good Essays -
The Project Overview Statement together with other documents such as “Conditions of Satisfaction”, a risk analysis and financial analysis will formulate the best possible picture for the project management team to take several crucial and influential decisions, such as which project management life cycle to adopt. Having erroneous, missing or misleading data can result in the uptake of the wrong project management life cycle, possibly effecting profits, the future justification of the project and the success of the project itself.…
- 877 Words
- 4 Pages
Good Essays -
could be evaluated considering its cost today vs. the cost in four years when its mandated. 3. This ranking is solely based on monetary factors and it’s not taking into consideration any nonfinancial factors. In addition, this ranking is not assessing any of the risk factors for each of the projects. A weighted scoring model should help assist in the project selection ensuring that projects that most closely align to the organizations goals and objectives are properly taken into consideration during decision making. 4. The “Effluent…
- 687 Words
- 3 Pages
Good Essays -
First of all, we believe it is necessary to ensure the evaluation method to be adopted for the future projects evaluation. So far, Metalcrafters’ board members were using 3 different methods to evaluate the projects. The three methods are internal rate of returns (IRR), net present…
- 1894 Words
- 5 Pages
Good Essays -
The project priority evaluation report has been carried out as a summary for all projects. Also note there is an annexed appendix which includes the financial evaluation of all projects, where the given financial data has been used to compute the expected return on investment.…
- 2696 Words
- 11 Pages
Good Essays -
Shrud is a milk processing unit which collects milk and then processes it. As the need for milk is constantly increasing, this gives easy access to the market. This milk is made available to the common people at a comparably low cost and also providing them with a good quality. As people are becoming health conscious, the need for vitaminzed milk is increasing.…
- 4545 Words
- 19 Pages
Powerful Essays -
1. Appraisal of a project: It is an economic technique for project appraisal, widely used in business as well as government spending projects (for example should a business invest in a new information system)…
- 483 Words
- 2 Pages
Satisfactory Essays -
plan. Much of the manual is based on the Project Design and Evaluation course developed by…
- 12944 Words
- 52 Pages
Powerful Essays -
This is to certify that the Summer Training Report entitled “PERFORMANCE APPRAISAL” submitted by VIBHA KUSHWAHA in partial fulfillment of the requirement for the award of degree MBA to Kanpur Institute of Technology, GBTU is a record of the candidate’s own work carried out by him/ her under my supervision. The matter embodied in this dissertation is original and has not been submitted for the award of any other degree.…
- 11009 Words
- 53 Pages
Powerful Essays -
Q 2-What is project appraisal? Elaborate the process involved in getting environmental clearance for a proposed business enterprise.…
- 1256 Words
- 6 Pages
Satisfactory Essays