ECON 101 Economic Principles : Financial Feasibility of a Project

1.A business case essentially refers to the reasons behind the investing or initiating a certain project. The primary logic behind the creation of a business case is that the allocation of resources that are required in the particular project should be specified in a detailed basis. An ideal business case covers all the qualitative and quantitative features of a project that has been proposed. In simpler terms a business case is fundamentally a report that aims to analyze the costs, benefits and risks that is associated with the propose project.

The feasibility for accomplishing a project refers to the decision making whether the proposed project is financially, economically or technically feasible by the organization or not. The feasibility of a project is generally analyzed before undertaking that particular project. The costs that will be incurred in establishing a certain project indicate the financial feasibility of a project, the availability of raw materials and the regional market within which the business will operate indicate the financial feasibility of the project  and the technology required to execute the project operations reveal the technological viability of the proposed project.

Therefore as it can be understood the primary difference between a business case and the feasibility of the project is that a business case is the estimation of the costs, benefits and risks of involved in a particular project and whether such a project can be taken up by the organization that is the rate of viability of the project refers to its feasibility (Schaltegger & Wagner, 2017).

2.The financial feasibility of a project can be increased by decreasing the costs that is required for the implementation of the project to such a level that they are covered by the revenue incurred by the project. The financial components that are analyzed in case of a proposed project are expenses, start-up capital, revenues, and income incurred by the investors. Therefore in order to increase the financial feasibility of the project the project manager has to develop methods that will reduce the expenses or the startup capital or by increasing the estimated revenue (Jain, Mullick & Kandpal, 2013).

3.The advantages of Seattle Public Utilities' benchmarking approach to selecting a DBO contractor are:

• The approach undertaken established the foundation of performance that boosted the competitiveness of the firm.
• The benchmarking approach mandated Seattle Public Utilities to get out of its comfort zone and develop short term plan for improving the undertaken project on the basis of the current situation rather than historical performance.
• Undertaking of the benchmark approach also helped the organization to focus on the process of change in order to improve the efficiency of the operations.

The only disadvantage of the benchmarking approach is that it did not enable the organization to look into the methods that have been utilized by the competitor firms in order to attain the performance standards. The benchmarking approach may also lead to complacency which sometimes becomes the major reason behind the downfall of an organization (Rolstadas, 2013).

References

Jain, V., Mullick, S. C., & Kandpal, T. C. (2013). A financial feasibility evaluation of using evaporative cooling with air-conditioning (in hybrid mode) in commercial buildings in India. Energy for Sustainable Development, 17(1), 47-53.

Rolstadas, A. (Ed.). (2013). Benchmarking—theory and practice. Springer.

Schaltegger, S., & Wagner, M. (Eds.). (2017). Managing the business case for sustainability: The integration of social, environmental and economic performance. Routledge.