Every project has certain phases in its development and implementation. The appraisal stage of the project cycle should provide information and analysis on a range of issues associated with the decision making of the project. First, the administrative feasibility of project implementation must...

This chapter discusses the alternative investment criteria commonly used in the appraisal of investment projects. The net present value (NPV) of a project criterion is widely accepted by accountants, financial analysts, and economists as the one that yields the correct project choices in all...

The financial analysis of a project helps determine the financial viability and sustainability of the project. Since the integrated project analysis begins with the financial analysis and then the economic analysis, the concepts and data ought to be organized in a consequential and consistent...

It is generally agreed that a project's net present value (NPV) is the most important criterion for the financial and the economic evaluation of a project from either the owner's or economic perspective. The NPV criterion requires that a project analyst recommend only projects with positive NPV....

In the financial cash flow analysis, a set of values for the project variables are selected to carry out the analysis for the base case that are projected over the life of the investment project. The values of these variables used in the analysis and the resulting outcomes from a predictive...

Non-tradable items are those which are not traded internationally. They include items such as services where the demander and producer must be in the same location, and commodities which have low value relative to either their weight or volume. In such cases the transportation charges prevent...

An investment project usually lasts for many years, hence its appraisal requires a comparison of the costs and benefits over its entire life. For acceptance, the present value of the project's expected benefits should exceed the present value of its expected costs. Among a set of mutually...

In the integrated financial and economic analysis, there is a need to choose a numeraire in which all costs and benefits are expressed. The most common practice has been to express all costs and benefits in terms of domestic currency at a domestic price level. This is the natural rule to follow...

While the financial analysis of a project focuses on matters of interest to investors, bankers, public sector budgets, etc., an economic analysis deals with the impact of the project on the entire society. The primary difference between the economic and financial evaluation is that the former...

The economic cost of capital, as measured in Chapter 8, deals with the intertemporal comparisons. It links the annual flows of benefits and costs over a project's life to its initial capital investment. In the present chapter we deal with another facet of the act of raising project funds from...