Case study of a dairy farm and problems in its feasibility study.

Abstract

This project examines how financial feasibility analysis is used to assess investment projects. The steps, that are applied in a generic feasibility study are presented. Problems that companies may face during and after a feasibility analysis were also identified. Different finance and accounting techniques, that are employed in a feasibility study to asses a project, like the NPV, IRR and Financial Ratios of a project were studied and applied. A case study of a dairy farm was used to illustrate, how these techniques are applied in an actual financial feasibility study. The projected cost, net profit and cashflows were used to discuss the financial viability of the dairy farm case presented in the case study. The conclusion that we came up with, was that NPV, IRR and financial ratios are very helpful in assessing the financial viability of project. However, other factors like market conditions, economic situation, size and nature of the business should be thoroughly assessed before a final decision is made.