financial feasibility

Definition

A study on whether a project is viable after taking into consideration its total costs and probable revenues. If the revenues cover the costs of the project, then the project is visible. For instance, the cost of expanding production will entail $500,000; however, the expected increase in revenue will be $1,000,000. Thus, the project is feasible as its revenue more than cover its costs.

Use this term in a sentence

The company wanted to build a new parking garage for its employees, but needed to look at the project's financial feasibility to ensure that there was enough revenue on reserve to cover all the costs.

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