A project is an organized programme of activities, carried together to
reach a definite goal, often of nonrecurring nature, with a specified
terminal point. It is a package of time bound, scheduled and
assembled activities, dedicated to the attainment of a specific goal of
successful completion of a work on time and within an allotted
It is a combination of human and nonhuman resources pulled together
in a temporary organization to achieve a specified purpose.
It is an appraisal for investment with the definite aim of producing a
flow of input over a specific period of time.
A unique and nonrepetative activities aim at systematically
corresponding inputs in the direction of intended outputs.
3. PROJECT CHARACTRISTICS
1. It is a complex set of things.
2. It is a unique and no two projects are similar.
3. It has a life cycle.
4. It calls for a teamwork. (i.e. Co-ordination of different activities)
5. It is exposed to the risk and uncertainties.
6. It has a mission or set of objectives.
7. It has a beginning and an end.
8. Its process is flexible.
9. It is interrelated.
10. It involves varied analysis in its successful completion.
11. Each activity in the project is a crucial for its success.
4. OTHER FEATURES
3. Single Entity
4. Team work
5. Life cycle
7. Frequent Changes
8. Made to Order Principle
9. High level of Sub contracting
10. Risk and Uncertainty
5. PROJECT CLASSIFICATION
1. Quantifiable and Nonquantifiable Projects
2. Replacement and Modernization Projects
3. Capacity Expansion Projects
4. Vertical Integration Projects
1. Backward Integration
2. Forward Integration
5. Concentric Diversification
1. Conglomerate Diversification
2. Research and Development Projects
3. Mandatory Investment Projects
4. Misc. Projects
6. PROJECT PHASES
1. IDENTIFICATION: It deals with the selection of the project after a
careful scanning of environment of investment opportunities and its
2. FORMULATION: Translation of ideas into concrete project with the
scrutiny of its important primary aspects.
3. APPRAISAL: Searching scrutiny, analysis and evaluation of
mechanical, technical, financial and economic variables. Assessing
the profitability, ROI, and Break even points.
4. SELECTION: Rational choice of a project in the light of objective
5. IMPLEMENTATION: Expeditious actions should be carried out
within the allotted resources.
6. MANAGEMENT: Judicious operation of the project or an enterprise
with object like maximization of NPV, maximization in return, and
increase in the rate of return at the lower risk
Site probing and prospecting, preparation of blueprints
and plant design, plant engineering and selection of
specific machineries and equipments.
Negotiating and drawing up of legal contracts with
respect to project financing, acquisition of technology,
construction of building and civil works, provision of
utilities, marketing arrangements
CONSTRUCTION Site preparation, construction of building and civil
works, erection and installation of machinery and
TRAINING Training to the engineers, technicians and workers
Start up of the plant (Technically crucial in the project
9. LEVELS OF DECISION MAKING
WHERE IS THE
IS THE DECISION?
Routine Semi-structured Unstructured
WHAT IS THE LEVEL
WHAT IS THE TIME
Short term Medium Term Long Term
11. FACETS OF PROJECT ANALYSIS
1. MARKET ANALYSIS:
• What would be the aggregate demand of the proposed
product/service in the future?
• What would be the market share of the project under appraisal?
• Consumption trend in the past and the present consumption level
• Past and present supply positions
• Production possibilities and constraints
• Structure of Competition
• Cost Structure
• Consumer behavior, test and preferences, attitude
• Administrative, technical and legal Constraints
12. FACETS OF PROJECT ANALYSIS
2. TECHNICAL ANALYSIS:
• Whether the preliminary tests and studies have been done or
• Whether the availability of raw material, power
and other inputs has been established?
• Whether the selected scale of operation is optimal?
• Whether the proposed layout of the site, building and plant
• Whether the production process chosen is suitable?
• Whether the work schedule have been realistically drawn up?
13. FACETS OF PROJECT ANALYSIS
3. FINANCIAL ANALYSIS:
• Investment outlay and the cost of the project
• Means of the financing
• Cost of Capital
• Projected Profitability
• Break-even Point
• Cash flows of the project
• Projected Financial Position
• Level of Risk
14. FACETS OF PROJECT ANALYSIS
4. ECONOMIC ANALYSIS:
• What are the direct economic benefits and the cost of the
projects measured in terms of market prices?
• What would be the impact of the project on the distribution of
income in the society?
• What would be the contribution of the project towards the
fulfillment of certain merit wants like self sufficiency,
employment and social order?
16. FEASIBILITY STUDY ANALYSIS
GENERATION OF IDEAS
CONDUCT FINANCIAL ANALYSIS
CONDUCT ECONOMIC &
IS THE PROJECT WORTHWILE?
PREPARE FUNDING PROPOSAL TERMINATE
IS THE IDEA PRIMA FACIE PROMISING
PLAN FEASIBILITY ANALYSIS