Feasibility Study
1. An analysis of a proposed subject or property with emphasis on the attainable income, probable expenses, and most advantageous use and design.
A feasibility study is often used by a developer to entice investors to put up the front money for a proposed development.
Such a study is required by some mortgage investors and lending institutions before granting a loan commitment. In addition to being a decision-making tool for the developer and lender, it is also a valuable sales tool. However, it is different from a marketability study, which is more concerned with demand for the contemplated use. (See absorption rate, front money.)
The purpose of a feasibility study is to estimate the rate of return obtainable for a specific project and to determine whether the proposed project is economically feasible.
2. A survey of an urban area using federal funds to determine whether it is practicable to under-take an urban renewal project within that area.
