Project Feasibility Analysis

Question 1

What is a development appraisal?

Answer 1

Development appraisal is a financial appraisal of a development. It is normally used to calculate either the residual site value or the residual development profit, but it can be used to calculate other outputs

Question 2

Who may require one?

Answer 2

Investors/Developers

Question 3

What is the difference between a development appraisal and residual valuation?

Answer 3

A development appraisal will typically give you the profitability of a proposed development and a residual valuation will give you the value of the land.

Question 4

What is a residual valuation?

Answer 4

Residual valuation is the process of valuing land with development potential.

Question 5

What is a feasibility study and what is it there for?

Answer 5

An exercise to assess the design and cost implications of a proposed project. Should be structured in a way that the client can decide whehter to proceed to next stage

Question 6

What is a brief?

Answer 6

• Project brief is a document outlining the clients requirements for the development of a built asset.
• It should describe the clients requirements in sufficient detail to allow the appointment of consultants. Is it then developed further with the benefit of the consultants team comments

Question 7

Who would prepare a brief?

Answer 7

• Initially the client team would gather information to set out the strategic objectives
• Once a consultant team is appointed, they would assist with the development of the project brief and respond to the brief by developing the design

Question 8

How would you prepare a project brief?

Answer 8

1. Meet the client and understand key requirements
2. Following meeting, prepare brief document and return to the client for comment
3. Develop the brief with consultants based upon;
   - Existing information
   - Site surveys
   - Workshops
   - Input from statutory authorities

Question 9

What would be included within the brief?

Answer 9

1. Description of the client
2. Site information
3. Spatial requirements
4. Technical requirements
5. Component requirements
6. Project requirements

Question 10

What are capital allowances?

Answer 10

Capital allowances is the practice of allowing tax payers to get tax relief on capital expenditure by allowing it to be deducted against their annul income

Question 11

What is the benefit of capital allowances?

Answer 11

They effectively allow a taxpayer to write off the cost of an asset over a period of time

Question 12

What information would you provide to assist a capital allowances exercise to take place?

Answer 12

Contract Sum Agreement
Copy of the variation account
Copy of the Final Account