Question

In: Operations Management

 A detailed overview of the feasibility study conducted at all three levels in relation to...


 A detailed overview of the feasibility study conducted at all three levels in relation to internet banking
Technical Feasibility (“Can it be built?”)
 Operational Feasibility (“Will it work?”) and
 Financial/Economic Feasibility (“Does it generate reasonable net profits or does it bring
net economic benefit?”)
 Using at least TWO (2) appropriate investment appraisal tools, make recommendations
on the why the particular project is feasible or otherwise.
KINDLY ANSWER ASAP
VERY IMPORTANT

Solutions

Expert Solution

First we need to understand what is the mean by internet banking?

Online banking allows a user to conduct financial transactions via the Internet. Online banking is also known as Internet banking or web banking. Online banking offers customers almost every service traditionally available through a local branch including deposits, transfers, and online bill payments.

What is relation of internet banking to technical feasibility

A technical feasibility study assesses the details of how you intend to deliver a product or service to customers. Think materials, labor, transportation, where your bank will be located, and the technology that will be necessary to bring all this together. It also checks the technical resources to required to purchase, install or operate the system of bank.

What is relation of internet banking to operational feasilbility

Operational feasibility is performed to check that that the final develoed product would be easily operated by client side or not. Operational feasilbility of internet banking is based on issues such as manager support, required training, workforce reduction, and adverse effects to users and customers. Technical feasibilityinvolves the technical resources that are needed to develop, purchase, install, or operate the system.

  • Online banking allows a user to conduct financial transactions via the Internet.
  • Consumers aren't required to visit a bank branch in order to complete most of their basic banking transactions.

What is relation of internet banking to Financial feasibility/ Economical Feasibility

financial feasibility of Internet banking study projects how much start-up capital is needed, sources of capital, returns on investment, and other financial considerations. The study considers how much cash is needed, where it will come from, and how it will be spent.

The purpose of an economic feasibility study (EFS) is to demonstrate the net benefit of a proposed cutomer for accepting or disbursing electronic funds/benefits, taking into consideration the benefits and costs to the agency, other state agencies, and the general public as a whole.

The feasibility report of Internet banking will look at how a certain proposal can work in a long-term basis or endure financial risks that may come. It is also helpful in recognizing potential cash flow. Another important purpose is that it helps planners focus on the project and narrow down the possibilities.

What is investment appraisal?

Investment appraisal is a way that a business will assess the attractiveness of possible investments or projects based on the findings of several different capital budgeting and financing techniques.

Payback period

Payback period is the length of time between making an investment and the time at which that investment has broken even.

To calculate the payback period, you’d take the cost of the investment and divide it by the annual cash flow. Investments with shorter payback periods are more desirable because it will take less time for an investor to receive back their capital.

Net present value

Net present value (NPV) is the difference between the current value of cash inflows and the current value of cash outflows over a determined length of time. NPV is used to calculate the estimated profitability of a project and it is a form of capital budgeting which accounts for the time value of money.

The time value of money is the principle that money is worth more in the present than an equivalent amount will be in the future because it has longer to earn interest. Cash inflows and outflows are adjusted according to the principle of the time value of money, taking available interest rates into account.

As a result, NPV determines whether it is more financially prudent to invest in a project, or to accept a different rate of return elsewhere based on projected future returns. To calculate the NPV, you would subtract the current value of invested cash from the current value of the expected cash flows.

If the NPV is positive, then it indicates that a project’s predicted earnings or profits are greater than the anticipated costs. If the NPV is negative, then the reverse is true, and the project or investment might not be pursued by the company.

Accounting rate of return

The accounting rate of return (ARR) is a ratio used in capital budgeting to calculate an investment’s expected return compared to the initial cost. Unlike NPV, ARR does not account for the time value of money, and if the ARR is equal to or greater than the required rate of return, then the project is deemed to have acceptable levels of profitability.


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