Project Appraisal-An organized method of determining if a project or proposal is viable before investing resources. It entails determining whether the project is feasible. It is simply an assessment tool for assessing a project in terms of its economic, social, and financial viability.
Generally performed by a multidisciplinary independent party who is not involved in the project.
General steps for project appraisal:
- Initial assessment
- defining problem and long-list
- consulting and short-list
- developing options
- comparing and selecting project
Why did Appraisal need in Project?
It is necessary because of multiple projects competing for limited resources, To choose the best project, Appraisal is crucial.
- It is done for checking the viability of a project proposal.
- For detailed pre-investment analysis of the market and technical feasibility; financial soundness, economic desirability, and finally, measuring its investment worth.
- Decision-making for allocating scarce resources.
- To ensure scarce resources are put to the most effective use.
- To determine various costs and benefits of proposed actions.
- Helps to select the best project alternatives through questioning proposals before resources are allocated.
- The feasibility study of the proposed project.
- Overall, leads to the project’s sustainability.
- Forms as the guideline for the new projects.
Project appraisal is achieved when all the aspects of the project are assessed.