The document outlines the process and objectives of project appraisal, which is the detailed evaluation of a project’s viability before resource commitment. It covers various aspects including financial, technical, economic, and environmental appraisals, each with specific criteria for assessment. Additionally, it explains the concept of time value for money, utilizing methods like discounted analysis to determine project acceptance based on cost-benefit evaluations.

1. PROJECT APPRAISAL
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2. TOPIC OUTLINE
 Meaning of project Appraisal
Objective of project appraisal;
Aspect of project appraisal
Concept of time value for money

3. Meaning of roject Appraisal
Project appraisal is a process of
detailed examination of several aspects
of a given project before resources are
committed.
It is done after the feasibility study of
the project has been completed.

4. Objectives of Project Appraisal
Key objectives of the Appraisal Process of a
Project:
Assessment of a project in terms of its
economic, social and financial viability
Decide to Accept or reject a Project
It is a tool to check the viability of a Project
Proposal

5. Aspect of project appraisal
Aspect of Project Appraisal Project
Financial Appraisal
Technical Appraisal
Economic Appraisal
Environmental Appraisal

6. Aspect of Project Appraisal
Financial Appraisal
Financial appraisal Focuses on the financial
feasibility of the project.
Factors such as investment outlay,
 The cost of capital,
Means of financing,
Projected profitability,
 Break-even points,
 Cash flows,

7. Appraisal criteria
Financial Appraisal Criteria
Can the project be financed?
Will there be sufficient funds to
cover the expenditure
requirements during the life of the
project?

8. Aspect Project Aspect
Economic Appraisal
Economic appraisal helps to justify the
benefits of the project against the cost to
produce the product.
Focuses on the total benefit of the project
and less on the costs spent on the project.

9. Economic appraisal......
In summary Economic Appraisal consider
• Social cost -benefit analysis
• Direct economic benefits and costs in
terms of shadow prices
• Impact of project on distribution of income
in society
• Impact on level of savings and investments
in society
• Impact on fulfillment of national goals :-
(1) Self sufficiency (2) Employment and (3)

10. criteria for economic appraisal
will the nation and society at large be
better off as a result of the project?
Will the project benefits be greater than
the project costs over the life of the
investment when account is taken of
time

11. Aspect of project Appraisal
Technical Appraisal
Technical analysis helps to study the
technical aspects of the Project. For
example, assessment of Tools and
Techniques, Design, Plans and Work
Schedules.
Availability of raw materials, power,
engineering services, maintenance,
transportation facility,Socially
acceptable technology

12. Criteria for technical appraisal
 Will the project work?
Has due attention been paid to
technical factors affecting the project
design, Given the human and material
resources identified,
 can the project activities be
undertaken and outputs achieved
within the time available and to the
required standards?

13. Environmental Appraisal
Environmental appraisal Concerned with positive
and negative impact of the Project on
environmental.
Environment Impact Assessment (EIA) is done to
examined impacts of the project to
Air
Water
Noise
Vegetation
Human life


14. Environment appraisal criteria
will the project have any negative
effects on the environment?
Have remedial measures been included
in the project design?

15. Concept of Time Value of Money
The cost & benefits of a project occur at
different points of time depending upon the
life of the project.
 The value of money changes over time, as
such value of costs & benefits would depend
upon the time of their occurrence.
 This is done by using discounted analysis
and undiscounted analysis.

16. Discounted Analysis
 Discounted Analysis:
Benefits Cost Ratio (BCR)
The ratio of the present value (at an appropriate
discount rate) of benefits and costs. A project is
accepted if BCR>1.
Net Present Value (NPV)
The difference between the present value(at an
appropriate discount rate) of benefits and
present value of costs. A project is accept if
NPV>0 and rejected if NPV<0.

17. Discounted analysis....
Internal Rate of Return (IRR)
That IRR is a discount rate which just equates
discounted benefits to discounted costs.
If IRR exceeds from the discount rate, the project
is accepted (otherwise rejected).
IRR = Lower + Difference x ( NPV at Lower
Discount Rate) discount between two (Sum of
NPVs at two Discount Rates (signs ignored) rate
discount rates

18. UNDISCOUNTED ANALYSI
Break-Even Analysis:
The break even point is the minimum capacity
utilization beyond which a firm starts making
profit from its operation.
Pay- back period
The pay back period is the length of time required
to recover the investment.

19. Thank you
THE END