What Is Project Appraisal?

Project Evaluation is a comprehensive technical and economic demonstration and evaluation of the plans, designs, and implementation plans of proposed investment and construction projects from the perspective of the enterprise as a whole, based on the feasibility study of investment projects in direct investment activities To determine the future development prospects of investment projects.

Project Evaluation

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Project Evaluation (Project Evaluation) is the

Project evaluation, demonstration and evaluation

Assessment of investment necessity

Basic procedures for project evaluation

1. Organizational arrangements

Organizational arrangements are the first step in project evaluation, that is, organizational strength and planning.

2.Collect data

Consulting services for direct investment

Project evaluation is carried out before the formal operation of the project.

I. Cost-benefit analysis

It is mainly to compare the social costs (that is, the price paid by the state and society for the project) with the project and the benefits provided to the society, and assess the extent to which the project will be done to the society. The most important principle is that the total income of the project must exceed the total cost, that is, the ratio of benefits to costs must be greater than 1.

Cost-effectiveness analysis

Utility includes effectiveness, quality, use value, benefit, etc. These standards often cannot be quantitatively evaluated and are not comparable. Therefore, the criteria for evaluating utility are difficult to express in absolute values. Relative values such as mobility, utilization, maintenance, and reliability are often used. The cost-utility analysis method mainly analyzes the unit cost of the utility, that is, the cost that must be consumed to obtain a certain utility, and the saved cost, that is, the analysis of the net benefit. If there are multiple solutions with the same function or benefit, the one with the lowest unit cost should naturally be selected.

There are three cases of cost-utility analysis:

(1) When the costs are the same, a solution with high utility should be selected;

(2) When the utility is the same, a low-cost solution should be selected;

(3) When the utility is increased and the cost is increased, a scheme with low unit additional cost for efficiency shall be selected.

Third, the multi-objective system analysis method

If the project has multiple uses, it is difficult to analyze it separately according to its purpose. In this case, a multi-objective system analysis method should be used, that is, analyze the effectiveness and costs, benefits and costs of the project from an overall perspective, and calculate the net benefits and costs Utility ratio.