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Evaluating Preliminary Investment Feasibility

By Chemical Engineering |

Before any engineering or design work can take place, a project’s feasibility must be considered. Reasonably accurate costs can be obtained using the preliminary estimate methodologies presented here Evaluating the feasibility early in an investment project’s timeline is critical for streamlining decision-making and avoiding unnecessary efforts. This article presents a combination of estimation methods and calculation examples that can be used as a model for an evaluation of the preliminary feasibility of an investment for a plant, project or product. The examples take on an established order that should be followed step by step in order to obtain the desired results. Once the strategic analysis has been completed, the financial feasibility must be investigated — this is the most important factor in choosing whether to terminate the project right away or to continue, because this step is where analyses can reveal that the potential profits may outweigh the risks. It is also important to remember that although this strategy is just an approximation, the methodology is robust, and results will be a relatively accurate approximation. Another final point that should be mentioned is that prices fluctuate from one year to another,…
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