Course: Evaluation of investment projects

Teacher: Andres Mota Solorzano

Student: Rubio Guerra Luis Angel

Title: Chapter 1 BACA

Date: 01 / 02 / 2024

I found the chapter quite interesting because in different subjects I had already dealt with similar
topics as in the book, the reading further deepened ideas and concepts that I had seen in the "Shark
Tank" programme. One interesting idea presented in the chapter is the need for multidisciplinary
analysis in making project decisions. This recognises the diversity of factors that can influence the
feasibility and success of a project, and the importance of considering these diverse perspectives
when assessing its feasibility.

However, it also points out some limitations and challenges in project evaluation, such as the inherent
uncertainty of the future and the variability in the results of different evaluators. This highlights the
complexity and difficulty of making decisions about projects, especially in an environment where
resources are limited and needs are diverse.

It also highlights the importance of project evaluation, both in economic and social terms. This
evaluation is essential to determine the feasibility and profitability of a project, as well as its impact on
society.

One of the interesting parts of the text is the description of the three levels of depth in a project
appraisal study: profile, pre-feasibility study and final project. These levels represent a progression in
the depth and detail of analysis, allowing for a more complete and accurate assessment of a project's
feasibility and potential. It also poses some limitations and challenges in the project appraisal
process. For example, it is mentioned that the assessment methodology does not decide for itself,
but provides the basis for making decisions, and that ultimately the final decision is often made by an
individual, not by the methodology itself. This underlines the importance of combining technical
analysis with personal judgment and experience when evaluating projects.

Another interesting part of the text is the importance given to market research in determining the
viability of a product in a specific market. It highlights the need to collect data from both secondary
and primary sources to get a complete and reliable picture of the demand and supply of the product,
as well as other relevant factors such as pricing and marketing. This underlines the importance of
understanding market conditions before investing in a project. A limitation of the text is the lack of
depth in the analysis of organizational, administrative and legal aspects in feasibility studies. It is
mentioned that these aspects are dealt with at the final project stage, but it is important to recognise
that these elements can also significantly influence the feasibility and success of a project, and
should be considered more comprehensively at earlier stages of the appraisal process.