It is defined as the process of obtaining relevant information about a project in order to ascertain its
financial viability. The preliminary steps involved in the financial analysis include:
1) Estimation of total capital outlay involves in the project.
2) Estimation of operating costs.
3) Estimation of operating revenue.
It purpose is to find out whether the project is attractive enough to secure funds needed for its
various activities and whether the project will be able to generate enough income to achieve the
objective for which it is undertaken.
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