CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
One of the major constraints to effective project implementation especially in developing economics is lack of adequate knowledge of how to package it to appeal to the public. Project packaging constitutes a vital aspect of investment decision process. Project packaging should help to decide the practicability and worthiness to embark upon a project. A project feasibility study sometimes referred to as project study is an investigation, which ascertains the viability and worth wideness of an exiting, or a new undertaking. It is often used for securing financial assistance for project execution. It guides promoters, business managers, financial executives and other interested groups in determining the actions they must take on a project in order to bring about its successful execution. For a feasibility study to be practicable, it must involve problem identification and definition. The collection of data collected, which are relevant to all aspect of the project, the analysis of data so collected and formulation of recommendations based on the analysis. An entrepreneur who is embarking on a project must have a long-range outlook on the intended business investment examine the alternative uses of capital and account for inflation in future values of cash flows, and forecast future events and financial requirement and carry out sensitive and risk analysis. These are highly sensitive areas that require expertise skills. Project analysis was two dimensions. Firstly, the assessment of the probability of its successful implementation and also the appraisal of the contribution of the project to the specific objectives. These two aspects are referred to as the feasibility and viability appraisal. This study provides an analysis and illustrations of the principle of feasibility and viability of a project and highlights the essence of the subject matter. It also relates the accountant’s contribution in order to make a project worthwhile.
OVERVIEW OF THE STUDY
The study is divided into two sections, Section one which comprises chapters 1,2 and 3. These chapters’ deals mainly on the scope and method of the research project specifically, chapter two will deal mainly on an evaluation of the theoretical concepts of investment appraisal. Hence the contributions of various authors which relates to the concept of feasibility and viability studies as well as the writers definitions of the role the accountant play in making a project feasible and viable hence “Literature Review”. The second section comprises chapter 4 and 5 and focuses on a practical illustration of feasibility and viability case stuffy of a household cassavastarch production.
1.2 STATEMENT OF THE PROBLEM
Every project is affected by factors outside and within itself. Often, success or failure depends more in the general business environment or climate in which it operates and on the general reputation on its sponsors. The problem of a successful industrialization in the developing countries is lack of knowledge of how to formulate a project in such a way that it’s potential and profitability either from the public or private viewpoint can be estimated on a firms basis- Ezenagu (1991:14). The project executors should be conversant with both projects objectives and the decisions to be taken to realize these objectives. They should be conversant with the available resources needed for the project. In the course of the project execution, some factors can effect the programme of activities. The project implementation should be alert to detect factors intervention signal that could multiage against the project and remedial actions taken to ensure that the objective of the project are Met Orjil (2001: 241).
re that the objective of the project are Met Orjil (2001: 241). According to Uwakaneme (1980:1) this problem can be pinned on the tendency in Nigeria entrepreneurs to neglect thinking through their plans carefully in the beginning (in form of feasibility ands viability study, before commuting scarce funds and energy apart from insufficient starting capital and shortage of skilled technical and managerial manpower. Available evidence indicates that even trusted accountants, consultants prepare project reports and projections, to suit their clients, requirements and earn four fees; insensitive of the credibility of such projections. Consequently, the proposals get rejected by the bankers, or share the facilities granted, the business proprietors soon fund themselves in trouble when they are faced with real life situations as distinct from the picture painted by the initial projections by the accountants.
1.3 OBJECTIVES OF THE STUDY
The objective of the study emanates from the above-identified problems. Therefore the major objectives of this study are as follows: – To appraise or bring to view the feasibility and viability studies on order to successfully carryout a project ideas. – To enlighten the role the accountants play in feasibility and viability appraisal in formulation and development of a business. – Using a cassava starch illustration of case study to illustrate the principle practice and application of feasibility and viability studies. – To appraise and determine the potentials of feasibility studies in a small-scale enterprise. – To determine the main techniques of appraisal commonly adopted for analytical purposes and to determine the reasonableness of such in practical situation using cassava starch small-scale business as a project study