I.

Executive summary 
A feasibility study should arrive at definitive conclusions on all the basic aspects of a
 project after consideration
consideration of various alternatives.
alternatives. These conclusions
conclusions and any
recommendations
recommendations made with regard to decisions
decisions or actions required
required from parties involved
in the project would have to be explained and supported by compelling evidence. For 
convenience of presentation, the feasibility study should begin with a brief executive
summar
summary y outlini
outlining
ng the project
project data (assessed
(assessed and assume
assumed)d) and the conclus
conclusions
ions and
recommendations, which would then be covered in detail in the body of the study; any
supporting material (statistics, results of market surveys, detailed technical descriptions and
equipment lists, plant layouts etc.), however, should be presented in a separate annex to the
study. The executive summary should concentrate on and cover all critical aspects of the
study, such as the following: the degree of reliability
reliability of data on the business environment;
environment;
 project input and output; the margin of error (uncertainty,
(uncertainty, risk) in forecasts
forecasts of market,
market,
supply and technological trends; and project design.

The executive summary should have the same structure as the body of the feasibility study,
and cover—but must not be limited to—the following areas:

Summary of the project background and history (chapter II)

• Name
Name and
and add
addre
ress
ss of proje
project
ct promo
promote
ter 
r 
• Project background
• Project
Project (corpora
(corporate)
te) objective
objective and outline
outline of the propose
proposedd basic
basic project
project strateg
strategy,
y,
includi
including
ng geograph
geographical
ical area
area and market
market share
share (domest
(domestic,
ic, export)
export),, cost leaders
leadership,
hip,
differentiation, market niche
• Project location:
location: orientation towards the market or towards resources (raw materials)
• Economic and industrial policies supporting the project

Summary of market analysis and marketing concept (chapter

concept (chapter III)
• Summa
Summari rize
ze resu
result
ltss of mark
marketeting
ing resear
research-
ch-'' busi
busines
nesss envir
environm
onmenent,
t, targ
target
et mark
marketet and
mark
market
et segm
segmententat
atio
ion
n (cons
(consum
umerer and
and prodproduct
uct group
groups)s),, channe
channels ls of dist
distri
ribut
butio
ion,
n,
competition. life cycles (sector, product)
• List
List annual
annual data
data on demand
demand (quantit
(quantities
ies,, prices)
prices) and suppl
supplies
ies (past,
(past, curre
current
nt and future
future
demand and supplies)
• Expla
Explain
in and just
justify
ify the market
marketing
ing strate
strategic
gicss for
for achie
achievin
vingg the proje
project
ct objec
objecti
tives
ves and
outline the marketing concept
• Indic
Indicat
atee proje
projecte
ctedd mark
market
eting
ing costs,
costs, element
elementss of the proje projecte
cted
d sale
saless prog
progra
ramm
mmee and
revenues (quantities, prices, market share etc.)
• Desc
Descri
ribe
be impa
impactctss on:
on: raw
raw mate
materirial
alss and
and suppsuppllies,
ies, loca
locatition
on,, the
the envi
enviro
ronm
nmenent,
t, the
the
 production
 production programme,
programme, plant
plant capacity
capacity and technolog
technology y etc.

 Raw materials
materials and supplies
supplies (chapter IV)
• Desc
Descri
ribe
be gen
gener
eral
al ava
avail
ilab
abil
ilit
ity
y of:
of:
Raw materials
Processed industrial materials and components
Factory supplies
 Spare parts
Supplies for social and external needs
• List annual supply requirements of material inputs
• Summarize availability of critical inputs and possible strategies (supply marketing)

 Location, site and environment (chapter V)

• Identify and describe location and plant site selected, including:
Ecological and environmental impact
Socio-economic policies, incentives and constraints
Infrastructural conditions and environment
• Summarize critical aspects and justify choice of location and site
• Outline significant costs relating to location and site

 Engineering and technology (chapter VI)

• Outline of production programme and plant capacity
• Describe and justify the technology selected, reviewing its availability and possible
significant advantages or disadvantages, as well as the life cycle, transfer (absorption)-
of technology, training, risk control, costs, legal aspects etc.
• Describe the layout and scope of the project
• Summarize main plant items (equipment etc.), their availability and costs
• Describe required major civil engineering works

Organization and overhead costs (chapter VII)

• Describe basic organizational design and management and measures required

 Human resources (chapter VIII)

• Describe the socio-economic and cultural environment as related to significant project
requirements, as well as human resources availability, recruitment and training needs,
and the reasons for the employment of foreign experts, to the extent required for the
 project
• Indicate key persons (skills required) and total employment (numbers and costs)

 Project implementation schedule (chapter IX)

• Indicate duration of plant erection and installation
• Indicate duration of production start-up and running-in period
• Identify actions critical for timely implementation

 Financial analysis and investment appraisal (chapter X)

• Summary of criteria governing investment appraisal
• Total investment costs
Major investment data, showing local and foreign components
Land and site preparation
Structures and civil engineering works
Plant machinery and equipment
Auxiliary and service plant equipment
Incorporated fixed assets
 Pre-production expenditures and capital costs
 Net working capital requirements
• Total costs of products sold
Operating costs
Depreciation charges
Marketing costs
Finance costs
• Project financing
Source of finance
Impact of cost of financing and dept service on project proposal
Public policy on financing
• Investment appraisal: key data
Discounted cash flow (internal rate of return, net present value)
Pay-off period
Yield generated on total capital invested and on equity capital
Yield for parties involved, as in joint venture projects
Significant financial and economic impact on the national economy and
environmental implications
• Aspects of uncertainty, including critical variables, risks and possible strategies and
means of risk management, probable future scenarios and possible impact on the
financial feasibility of the investment project
• National economic evaluation
• Conclusions
Major advantages of the project
Major drawbacks of the projects
Chances of implementing the project

Bibliography
United Nations. Extracts of industrial feasibility studies, v.l. Industrial planning and
 programming series. No. 7. (ID/SER.E/7)
Sales no.: 73.II.B.4.

See also the bibliographies provided for the individual chapters.

 II. Project background and basic idea

To ensure the success of the feasibility study, it must be clearly understood how the project
idea fits into the framework of general economic conditions and industrial development of 
the country concerned. The project should be described in detail and the sponsors
identified, together with a presentation of the reasons for their interest in the project.

 Description of the project idea

• List the major project parameters that served as the guiding principles during the
 preparation of the study
• Project (corporate) objectives and description and analysis of proposed basic project
strategy, including:
Geographical area and market share (domestic, export)
Cost leadership
Differentiation
Market niche
• Project location: market- or resource- (raw material) oriented etc.
• Product and product mix. plant capacity and location, implementation schedule
• Economic and industrial policies supporting the project
• Outline economic, industrial, financial, social, and other related policies
• Show different geographical levels, such as international, regional, national, areal and
local
• Highlight the economic, sectoral and subsectoral project coverage

 Project promoter or initiator 

• Names and addresses
• Financial possibilities
• Role within the project
• Other relevant information

 Project history
• Historical development of the project (dates of essential events in project history)
• Studies and investigations already performed (titles, authors, completion dates,
ordering parties)
• Conclusions arrived at and decisions taken on the basis of former studies, and
investigations for further use within the current study

 Feasibility study
• Author, title
• Ordering party

Cost of preparatory studies and related investigations

• Pre-investment studies
• Opportunity studies
• Pre-feasibility studies
• Feasibility study
• Partial studies, support studies
• Experts, consultant and engineering fees
• Preparatory investigations, such as:
Land surveys
Quantity surveys (quantification of building materials)
Quality (laboratory) tests
Other investigations and tests
• For calculation use schedule II and insert total in schedules X-2 and X-6.

Schedule II. Costs of pre-investment studies and 

 preparatory investigations
(insert in schedule X-2)
Project:
Date:
Source:
Currency: Units:

 Item description Costs of   Costs of  Total costs Year 

foreign local 
components components
Pre-investment studies
--
--
--

Total costs, pro-investment studies

Preparatory investigations
--
--
--

Total costs, preparatory investigations

Grand total