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Abstract: The decision to invest in a project is very difficult. Therefore, before developing a project, we need to determine whether the idea of a project is feasible, if the investment of resources in the project is profitable for the promoter and creates added value for its beneficiaries. Also, if there are several scenarios to solve the project problem, you need to decide which one is the most advantageous. Here comes the cost-benefit analysis, a financial management tool used by decision-makers to help substantiate decisions on financing investment projects.
The paper reviews the methods used in the cost benefit analysis and the case study is used as the research method, the article presenting the financial assessment for an investment project for the construction of a waste incinerator with energy recovery. The article aims to study the financial feasibility of the project through two indicators: net present value and internal rate of return.
Keywords: project, feasibility, net present value, internal rate of return
Introduction
An analysis of the feasibility of a project idea can determine whether the investment to be made will be successful or the investment decision can generate loss of money, resources, time, the project proving to be unprofitable. Such an analysis allows for answers to several questions:
* Is the company able to invest in the project?
* Are there favourable conditions and sufficient funds to successfully complete the investment?
* Is the implementation of the project subject to risks? What risk response solutions can be applied to counteract them?
* Once the investment is made, will it prove profitable?
The feasibility study of a project idea is done in several ways:
* Market feasibility that allows the market to assess the potential of the market to validate the viability of the project and adopt a fair competitive position; it determines whether the idea of a project is feasible under current market conditions;
* The technical and organizational feasibility that determines whether the firm owns or has access to the material, technological and human resources needed to implement the project, the effects the project may have on the environment, analyzes the legislative context in which the project will be carried out, and the political one to identify the factors that could create...