Feasibility Analysis: Return On Investment
Feasibility Analysis: Return On Investment
Feasibility Analysis: Return On Investment
A feasibility study is an analysis that takes all of a project's relevant factors into account—
including economic, technical, legal, and scheduling considerations—to ascertain the likelihood of
completing the project successfully. Project managers use feasibility studies to discern the pros and
cons of undertaking a project before they invest a lot of time and money into it.
A feasibility study is simply an assessment of the practicality of a proposed plan or project.
As the name implies, these studies ask: Is this project feasible? Do we have the people, tools,
technology, and resources necessary for this project to succeed? Will the project get us the return on
investment (ROI) that we need and expect?
Product
For the 700,000 people living in Ugu, a municipality in the province of KwaZulu-Natal on
South Africa’s east coast, potable drinking water was very expensive: $1.00/m 3 after a government
subsidy of $0.50. In comparison, a cubic meter of water in New York City was $.92/m 3.
It was no mystery as to why drinkable water was so costly: Like many coastal communities in
South Africa, Ugu suffered from a weak electric grid. While it had access to an endless supply of
ocean water, desalinating it required the use of a diesel generator.
According the customer perspective, the price of water produced from the Wave 2OTM was
arguably biggest selling point: between $1.00 and $2.00/m3.
Industry/Market Analysis
By RME’s estimates, Ugu would need as many as 17 Wave 2OTM systems to meet the
municipality and Department of Water Affairs’ goal of providing 0.5m 3/day of additional fresh water
to every household in rural areas. Approximately 61,000 households in Ugu lacked safe drinking
water.
Organizational Analysis
Financial Analysis