feasibility analysis vs investment analysis

[Wil in Norcal]

Taking my test in a couple of days and i just cant seem to differentiate between these two terms. Possibly too may hours in front of computer/book.

I understand that a feasibility analysis is a study of the cost benifit relationship of an economic endeavor, however how is that different from an investment analysis.

Please if someone could give me an example of each one I would appreciate it. I cant seem to grasp the meanings from just the definitions.

 

[Fred]

FA is probably more narrow, a subset of IA.

An example? This may not help, but...
You are sitting around trying to figure out what cap rate is implied by various asking prices. That's IA.
But, if you are trying to see if the cap rates exceed an established benchmark, that is FA.

It was 15 years ago, but I don't remember that coming up on the licensing exam.

 

[Howard Klahr]

You are correct in your concept of a feasibility study, this type of analysis reflects market imposed factors in relation to the development cost. These market imposed factors (rent levels, vacancy rates, operating expenses, commissions, development costs, etc) tend to be somewhat similar from one investor to the next.

An investment analysis however is based upon a set of inputs for a specific purchaser/developer, etc. Factors such as cost of funds, investment objectives, risk tolerance, desired/forecasted return, etc will vary from one entity to the next.

Hope this helps. Good luck on your exam.

 

[Wil in Norcal]

I think it did help. As I understand it, a feasibility study answers questions in relation to a particular investment regardless of investor, where as an investment analysis is almost an investor analysis. i know it is not exactly an investor analysis but I think it will serve as a good memorization technique.

 

[Wil in Norcal]

Thank you for your help This form is great