Project Feasibility Time Value of Money Anjum Asim

Project Feasibility & Time Value of Money Anjum Asim Shahid Rahman Chartered Accountants. Member firm of Grant Thornton International

Project Concept Scope of work Market Assessment Investors Benefit SWOT Analysis Financial Analysis Way Forward Project Feasibility A decision making toll to do or forgo a project. It includes: § § § Justification of Project Need Viability/do ability of a project Financial & Economic Analysis Risks identification and mitigation Option Analysis Anjum Asim. Shahid Rahman. Chartered. Accountants. Memberfirmof of. Grant. Thornton. International

Project Concept Scope of work Market Assessment Investors Benefit SWOT Analysis Financial Analysis Way Forward Project Feasibility - Justification of Project Need § § § Demand & Supply Gap Better Quality or increased efficiency Cost Reduction Strategic objective Regulatory Requirement Anjum Asim. Shahid Rahman. Chartered. Accountants. Memberfirmof of. Grant. Thornton. International

Project Concept Scope of work Market Assessment Investors Benefit SWOT Analysis Financial Analysis Way Forward Project Feasibility - Viability/do ability of a Project feasibility access project viability from following perspectives : § § § Legal Technical Financial Environmental Social Anjum Asim. Shahid Rahman. Chartered. Accountants. Memberfirmof of. Grant. Thornton. International

Project Concept Scope of work Market Assessment Investors Benefit SWOT Analysis Financial Analysis Way Forward Project Feasibility - Financial & Economic Analysis Financial Analysis is investors perspective and includes § § § Determining Investment Requirement Bankability of Project Opportunity Cost Estimation of Required Return Projections of Expected Return Economic analysis measures overall benefit to economy and is normally from government perspective for prioritizing a project. Anjum Asim. Shahid Rahman. Chartered. Accountants. Memberfirmof of. Grant. Thornton. International

Project Concept Scope of work Investors Benefit SWOT Analysis Financial Analysis Way Forward Market Assessment Project Feasibility-Risk Identification & Mitigation Plan Normal Project Risks § Cost overrun § Time overrun § Performance Risk § Natural Hazards § Demand Risk § Economic Risks § Government Support Mitigation plan involves structuring project so as to pass through maximum possible risks Anjum Asim. Shahid Rahman. Chartered. Accountants. Memberfirmof of. Grant. Thornton. International

Project Concept Scope of work Market Assessment Investors Benefit SWOT Analysis Financial Analysis Way Forward Infrastructure Projects & Feasibility § High Capital Costs § Long duration of projects § No easy exits Anjum Asim. Shahid Rahman. Chartered. Accountants. Memberfirmof of. Grant. Thornton. International

Project Concept Scope of work Market Assessment Investors Benefit SWOT Analysis Financial Analysis Way Forward Time Value of Money This is about perceived value of time and is so different for different people /groups It is based on concept of equal purchasing parity over different time periods. Normally it is defined as “Interest Cost” Anjum Asim. Shahid Rahman. Chartered. Accountants. Memberfirmof of. Grant. Thornton. International

Project Concept Scope of work Market Assessment Investors Benefit SWOT Analysis Financial Analysis Way Forward Time Value of Money- Infrastructure Projects Cost of delaying a project 100 Billion -------> 150 Billion (50 Billion) In addition there are other costs including Poor quality of life for delayed period and other economic losses. Anjum Asim. Shahid Rahman. Chartered. Accountants. Memberfirmof of. Grant. Thornton. International

Project Concept Scope of work Market Assessment Investors Benefit SWOT Analysis Financial Analysis Way Forward TVM – Project Prioritization Toll limited availability of capital requires prioritization of projects. Different projects may have different cash flow patterns over the project life. TVM equates cash flows of each project in present value terms. All else equal, the project with highest NPV should be taken first Anjum Asim. Shahid Rahman. Chartered. Accountants. Memberfirmof of. Grant. Thornton. International

Project Concept Scope of work Market Assessment Investors Benefit SWOT Analysis Financial Analysis Way Forward Thank you Anjum Asim. Shahid Rahman. Chartered. Accountants. Memberfirmof of. Grant. Thornton. International