A project appraisal allows a company or an organization to analyze a project and ensure that it provides an effective plan to devise a solution to a business problem. This process helps the company establish the financial viability and the effectiveness of a project.
Project appraisal is an ongoing and consistent endeavor through which a project is assessed, and its results determine whether a project is canceled or approved. Project appraisal serves as the first step in the preplanning phase of a project. It features multiple stages, including concept analysis, concept brief, project organization and project approval. The first stage involves developing the concept of a project, identifying the problem and determining viable solutions.
The second stage entails the creation of a summary that defines the project's goals, scope and projected costs. The next stage includes the development of an organizational structure based on the project summary from the previous stage. This structure handles the questions regarding roles, responsibilities, requirements and implementation of the project. The final stage requires a review of all the previous stages and creating a succinct document containing all the relevant information. Once the analyses concerning the cost effectiveness and financial feasibility are complete, the project ends up either approved or rejected.