All financial decisions on any project appraisal are based on

Explanation:

Project Appraisal:

• Project appraisal is a process of exploration, review and evaluation taken on by the decision maker as the alternative options for development are defined within the project planning process.
• It can also be expressed in terms of a number of mathematical techniques that simplify the comparison of project options on the basis of an agreed criterion or set of criteria.
• These techniques provide a rational and significant approach to evaluating diverse aspects of different alternatives and the ability of these alternatives to achieve a set objective.
• The primary objective is to aid in the process of making informed and rational choices regarding the most effective use of available scarce resources.
• Students of engineering must develop an awareness of the relevant economic, financial, social and political factors of significance to engineering development projects, along with an understanding of risk analysis and quality systems.
• This knowledge is a vital building block in an engineering student's education, given that the ability to analyse and solve engineering problems must include a capacity to make choices on the basis of environmental/commercial as well as engineering/technical constraints. The ultimate objective of project appraisal is to secure the greatest benefit from the available scarce resources or present value of the money.