Question

Preparing a project report involves an analysis of financial data to project future cash outflows
and inflows, as well as, a thorough assessment of the following:
1. The project’s potential in the market
2. Its technical feasibility
3. Its environmental impact
4. Its financial feasibility
5. Availability of managerial skills required for the project
Why i s a n environmental impact documented in a project report and how can it affect
future cash inflows and outflows.

Answer 1

It is the assessment of the environmental consequences whether positive and negative of a project prior to the decision to move forward with the proposed action

Reasons for inclusion of an environmental impact in a project report:-

1) to disclosure significant environmental effects proposed projects would have to decision makers and the public

2) to identify the methods to avoid or reduce environmental damage.

3) to avoid adverse environmental impacts by requiring implementation of feasible alternatives or mitigation measures

4) to foster interagency coordination.

5) to enhance public participation.

6) to disclose reason of approvals for the projects with significant environmental impacts to the public.

how can it affect future cash inflows and outflows

It will improve future cash flows because of the following reasons:

Reduced cost time of project implementation (since everything regarding the project is predetermined so there is no wastage of time and resources)

Cost-saving modifications in project design (environmental assessment will have cost-saving elements in it).

Increased project acceptance

Avoid impacts and violations of Laws and regulations (hence, no fine so there is cash saving).

Improved project performance

Avoided treatment/ clean up costs.