The term “Economical Viability” is not a phrase heard on a daily basis, outside of a few certain financial circles. That said, they are heard quite often, though separately.
Therefore, to define this term let’s first view them individually.
“Economical” (or economic) is generally associated with being careful, efficient, and prudent; thereby operating with little waste or at a savings.
“Viability” (or viable) is to be capable of working, functioning, or developing adequately as an independent unit and having a reasonable chance of succeeding.
When combining the two, “Economical Viability” vis-a-vis project financing begins to take on the meaning that a project will independently support itself in meeting and/or exceeding its financial obligations and risks while also producing a level of income consistent with the expectations of the associated parties.
To any investor, this term is crucial to any given project. Therefore, as part of the general funding requirements set forth by investors, an Economical Viability Report must be completed by an independent third party (firm) who will confirm whether a project is (or not) economically viable.
Always make sure that you make an informed decision in all cases,
All the Best,
One thought on “Defining “Economic Viability””
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