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MindMap Gallery Section 10 Project Feasibility Study

Section 10 Project Feasibility Study

This is a mind map about Section 10 Feasibility Study of Engineering Projects. The main contents include the stages and content of feasibility studies, economic evaluation of engineering projects, environmental impact assessment and social assessment of engineering projects, and feasibility study reports of engineering projects.

Edited at 2022-07-03 17:25:23

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Section 10 Project Feasibility Study

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Outline

Section 10 Project Feasibility Study

Stages and content of feasibility study

Stages of Feasibility Study

Investment opportunity research

Propose project investment direction suggestions, and analyze the political and economic development environment, industrial policies, and Analyze resource conditions, market trends and profit possibilities to find the most favorable investment opportunities

Develop project proposals through research on investment opportunities

The purpose is to clarify the investment direction

The investment estimate error at this stage is ±30%

preliminary feasibility study

The research results will form a preliminary feasibility study report

The investment estimate error at this stage is ±20%

Detailed feasibility study

Also called a final feasibility study

It is the basis for investment project decisions

The main work is to conduct an in-depth and detailed analysis of the necessity of project construction from technical, financial and socio-economic aspects. Possibility and economic rationality

Put forward a concluding opinion of "feasible" or "not feasible" and finally form a feasibility study research report

The investment estimate error is ±10%

10%; the required expenses account for the proportion of the total investment, ranging from 0.2% to 1.0% for large projects and 1.0% to 3.0% for small projects.

Project evaluation decisions

The main task is to provide evaluation opinions on the project feasibility study report

Feasibility study content

General description and project overview of the project

Market demand and proposed scale

Resources, raw materials, fuels and utilities

Site selection and factory construction conditions

Technical solutions, equipment solutions and engineering solutions

Environmental protection, earthquake prevention, flood prevention and other measures

Enterprise organization, labor quota and personnel training

construction progress plan

Investment Estimation and Fund Raising

Financial analysis and national economic analysis

Overview

Economic evaluation of engineering projects

Economic evaluation classification

Project financial evaluation

Analyze project profitability, solvency and financial viability

Main work content

Select basic data and parameters for financial evaluation

Estimate project financial benefits and costs

Sales (operating) income

project total investment

Construction Investment

Interest during the construction period: Interest is calculated on a half-year basis for the current year, and interest is calculated on a full-year basis for the remaining years.

working capital

The components of current assets: accounts receivable, inventory, cash, prepaid accounts

Components of current liabilities: accounts payable and accounts received in advance

Operating costs

Operating costs = purchased raw materials, fuel and power costs, wages and benefits, repair costs, other costs

total cost

The sum of operating costs, depreciation, amortization and interest expenses

Calculation formula: total cost = purchased raw materials, fuel and power, wages and benefits, repairs, other expenses, depreciation, amortization, interest expenses

Classification

fixed cost

Including depreciation, amortization, repairs, wages and welfare expenses (except piece rate wages) and other expenses, generally All interest incurred during the operating period is often regarded as fixed cost

Variable costs

Including purchased raw materials, fuel and power costs, piece-rate wages, etc.

taxes

Prepare basic financial analysis reports

Project investment cash flow statement, project capital cash flow statement, investor cash flow statement, profit and profit distribution statement, financial plan cash flow statement, balance sheet, loan principal and interest payment schedule

Conduct project profitability analysis, debt solvency analysis, and financial viability analysis

uncertainty analysis

sensitivity analysis

Break-even analysis

National Economic Assessment

basic concept

shadow price

Prices that reflect the true economic value of inputs and outputs reflect market supply and demand conditions and resource scarcity.

Measure the cost-effectiveness of inputs or outputs of commodities or production factors from the perspective of the whole society

Determine shadow prices based on social goals determined by government development policies

shadow wages

Refers to the project using labor and consuming labor resources, causing society to pay a price

Calculating labor costs with shadow wages in national economic evaluation

Shadow wage = labor opportunity cost, new resource consumption

social discount rate

The state formulates and publishes a unified social discount rate

shadow exchange rate

Transfer Payment

Main contents: ①Taxation; ②Domestic bank borrowing interest; Domestic bank borrowing interest; Domestic bank borrowing interest; ③National and local government subsidies for projects. National and local government subsidies for projects.

The relationship between national economic evaluation and financial evaluation

The relationship between financial evaluation of construction projects and the national economy

National economic evaluation examines the benefits and costs of the project from the perspective of the country as a whole, using shadow prices, shadow wages, shadow exchange rates, social discount rates, etc. to calculate the net benefits that the project brings to the national economy.

This can be done on the basis of a financial evaluation or directly.

If it is carried out on the basis of financial evaluation, transfer payments that have been calculated as benefits or expenses in the financial evaluation will first be eliminated, and indirect benefits and indirect expenses not reflected in the financial evaluation will be added.

To conduct national economic evaluation directly, the direct benefits, indirect benefits, direct costs and indirect costs of the project should first be identified, and on this basis, the national economic evaluation indicators should be calculated.

The difference between financial evaluation and the national economy (also called macro)

Different evaluation angles

Financial evaluation: It examines currency revenue and expenditure, profitability and loan repayment ability from a financial perspective.

National economic evaluation: It examines the cost and contribution of the project to the country from the perspective of the country as a whole, that is, the national economic benefits, and is used to determine the macro feasibility of the investment behavior.

Benefits and costs have different meanings and division ranges

Financial evaluation: only calculate the direct benefits and expenses of the project

National economic evaluation: The indirect benefits and costs caused by the project, that is, the external effects, must also be calculated and analyzed.

Different formats are used for evaluation

Financial Evaluation: Current Price

National economic evaluation: using shadow prices determined based on opportunity costs and supply and demand

The main parameters are different

Financial evaluation: Official exchange rates are used and discount rates are based on industry-specific benchmark yields

National economic evaluation: using the shadow exchange rate and social discount rate uniformly determined by the state

Criteria for choosing between financial evaluation and national economic evaluation

Generally, the conclusions of the national economic evaluation should be used as the main basis for project decision-making.

Environmental impact assessment and social assessment of engineering projects

environmental impact assessment

Classified Management of Environmental Impact Assessment

For projects that may cause significant environmental impacts - prepare environmental impact reports

For projects that may cause mild environmental impact - prepare an environmental impact report form

Has little impact on the environment - fill in the environmental impact registration form

Re-examination after 5 years from the date of approval

Environmental Impact Assessment Report Contents

①Overview of the construction project; ②The current situation of the environment surrounding the construction project; ③Analysis, prediction and assessment of possible impacts of construction projects on the environment; ④Construction project environmental protection measures and their technical and economic justification; ⑤Economic profit and loss analysis of the impact of construction projects on the environment; ⑥ Suggestions on implementing environmental monitoring for construction projects; ⑦Environmental impact assessment conclusion.

Requirements related to environmental impact assessment

Before submitting the environmental impact report of a construction project for approval, the construction unit shall hold demonstration meetings, hearings, or take other forms to solicit opinions from relevant units, experts and the public.

Environmental Impact Assessment of Real Estate Investment Projects

If it involves environmentally sensitive areas and requires self-built supporting sewage treatment facilities, an environmental impact report form must be prepared

Environmentally sensitive areas of real estate projects mainly include

①Natural reserves, scenic spots, world cultural and natural heritage sites, special marine reserves, and drinking water source reserves; ② Basic farmland protection areas, basic grasslands, forest parks, geological parks, important wetlands, natural forest areas, and important habitats for wild animals Land, key protected wild plant growth and breeding areas; ③Cultural relic protection units; ④ For standard factory real estate projects, environmentally sensitive areas also include residential, medical and health, cultural education, scientific research, and administrative offices. An area with public functions as its main function.

For other real estate investment projects, an environmental impact registration form must be prepared

Social evaluation

Scope of application of social evaluation

Social evaluation is suitable for investment projects with complex social factors, long-lasting social impact, significant social benefits, prominent social contradictions, and large social risks.

They mainly include: water conservancy project projects that require a large number of immigrants to relocate or occupy a large amount of farmland, transportation projects, mineral and oil and gas field development projects, poverty alleviation projects, rural regional development projects, as well as cultural, education, health and other public welfare projects.

Main contents of social evaluation

social impact analysis

Analysis predicts the possible positive impacts (often called social benefits) and negative impacts that a project may have

Mutuality analysis

Analyze and predict whether the project can be accepted by the local social environment and humanistic conditions, and the extent to which the local government and residents support the existence and development of the project.

social risk analysis

Analysis is the identification and ranking of various social factors that may affect the project

Classification of social stability risk levels

High risk: Most people have opinions and have particularly strong reactions to the project, which may trigger large-scale mass incidents

Medium risk: Some people have opinions and strong reactions to the project, which may lead to conflicts.

If the risk is high or medium, the approval, verification and reporting shall be denied.

Low risk: Most people understand and support but a small number of people have opinions on the project. Conflicts can be prevented and resolved through effective work.

If the risk is low but there are reliable prevention and control measures, it can be approved, approved or reported

Major projects should conduct social stability risk analysis during the feasibility study stage

Engineering project feasibility study report

Feasibility study report preparation

Compilation basis

Preparation requirements

Constituent content

Cover, abstract, table of contents, main text, attachments, drawings, schedules, etc.

Engineering project feasibility study report text structure and content

General description of the project

Including: background of project proposal, status of project investors and preparatory units, basis for preparation of project feasibility study report

Social evaluation

It includes: analysis of the project's impact on society, analysis of the compatibility between the project and the location, analysis of the social risks of the project, and social evaluation conclusions.

Real estate development project feasibility study report text structure and content

Feasibility study report evaluation

Normative assessment of report preparation

Assessment of the authenticity, reliability and accuracy of report content and results

Project construction necessity assessment

Project construction conditions assessment

Project Environmental Impact Assessment

Evaluation of technical solutions, equipment solutions and engineering solutions

Investment Estimation and Fund Raising Assessment

Project benefit assessment