A financial appraisal is a method used to evaluate the financial viability of a proposed project. It assesses the extent to which a project will generate revenues sufficient to meet its financial obligations as measured by the Net Present Value (NPV) of its cash flows. All revenues resulting from, and expenditures incurred under, the project are taken into account. The primary features of assessment are:
◼ project cash flows including sources of funding
◼ sensitivity of financial projections to key project risks and
◼ adequacy of the estimated investment cost and financial impact of alternative projects.