AENG 527 Project Feasibility Study

Department of Aeronautical Engineering

PATTS College of Aeronautics

Lecture 2

PROJECT SUMMARY
The Project Summary presents the highlights, descriptive definition, long-range objectives,
feasibility criteria, history, and basic conclusions of the project under study. It gives the analyst
and the financier a “capsule view” of the whole project.

Normally, this portion contains the name of the firm, and the location and size of its head office,
plant site, and factory. It also presents a comprehensive description of the business and its
operations and briefly defines the product lines of the business.

Major findings on the market, technical, financial, socio-economic, and management feasibility
of the project are discussed under this section. The status and timetable of the project must also
be stated.

A. NAME OF THE ENTERPRISE

Briefly explain the reason for such choice of name.

B. LOCATION

Pinpoint the location of the head office and the plant site and give the main reasons for
choosing them. The factors which affect the choice of location are the sources of raw
materials, labor, and utilities; proximity to the market; nature of available transportation;
and the cost of land and buildings. The project must choose a location where maximum
efficiency can be attained at the lowest possible cost.

C. DESCRIPTIVE DEFINITION OF THE PROJECT

1. Related national program

Is the project in line with any government-encouraged undertaking?

2. Affinity to regional or sectoral studies

Is the project a result of encouraging findings in certain regions or sectors of the

country?

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 3. Project potential and proponent

Give a conceptual description of the project’s potential worth and importance and the
men behind it.

D. PROJECT’S LONG-RANGE OBJECTIVES

What does the project expect to achieve in 10 years in terms of size, capacity, volume,
worth, role in its industry and in the economy, etc.?

E. FEASIBILITY CRITERIA

What were the most important guidelines used to judge the feasibility of the project? Was
it profitability? Did it seriously consider the impact on the socio-economic environment?

F. HIGHLIGHTS OF THE PROJECT

1. History

How did the project come about?

2. Project timetable and status

How long will it take before the project goes into operation? What stage is the project
presently in?

3. Nature of the industry

Briefly describe the industry, its product lines, the demand-supply situation, history,
growth patterns, problems and potentials, and role in the economy.

4. Mode of financing

Briefly discuss the sources of funds, the financing terms, and the reasons for choosing
such sources and terms.

5. Investment costs

How much funds are necessary to make the project operational? How are these funds
allocated?

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G. MAJOR ASSUMPTIONS AND SUMMARY OF FINDINGS AND
CONCLUSION ON THE FOLLOWING:

1. Market feasibility

Discuss the nature of the unsatisfied demand which the project seeks to meet, its growth
and the manner in which it is to be met. Here, the supply-demand situation is
examined, the target markets analyzed, and the marketing program formulated.

2. Technical feasibility

Discuss the nature of the product line, the technology necessary for production, its
availability, the proper mix of production resources, and the optimum production
volume.

3. Financial feasibility

Present the overall financial picture in terms of operating cash requirements,

profitability, and cash flow.

4. Socio-economic feasibility

What are the effects of the project on society and the economy as a whole? Is it
generally beneficial to the people? Is it in line with the economy’s development
program?

5. Management feasibility

What is the management structure? Is it appropriate for the managerial needs of the
project? What is the salary scale? Is it compatible with industry standards?