Which factor is NOT typically included in a feasibility study?

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BlackTom AI · Accepted Answer

We start by restating the question and listing the available options to ensure clarity.
Question: Which factor is NOT typically included in a feasibility study?
Answer options: 1) Contractor’s bid day markup, 2) Market demand at project completion, 3) Owner’s long-term strategic goals, 4) Cost of borrowing money

Now we analyze each option one by one based on common Feasibility Study components.
Option 1: Contractor’s bid day markup. A feasibility study is primarily about assessing whether a project is viable economically, technically, legally, and timewise. It typically includes market demand, financing availability and costs, and alignment with owner goals. A contractor’s bid markup is more relevant to the procurement phase or detailed cost estimation, not a preliminary viability assessment. Therefore, this option is not typically included at the feasibility stage and is considered outside the standard feasibility scope.

Option 2: Market demand at project completion. This is commonly a core part of a feasibility study. It evaluates whether there will be sufficient demand or need for the project outcome when it’s completed, which directly affects potential success and ROI. Thus, it is included.

Option 3: Owner’s long-term strategic goals. Aligning a project with the owner’s strategic objectives is central to feasibility, especially from a strategic and risk perspective. If the project does not support the owner’s goals, it is unlikely to be pursued, so this is included.

Option 4: Cost of borrowing money. Financing considerations are standard in feasibility analyses, as capital costs and debt service influence viability. Access to favorable financing terms and the burden of interest are assessed as part of the financial feasibility.

In summary, the feasibility study typically covers market demand, alignment with owner strategy, and financing considerations. It does not usually incorporate the contractor’s bid day markup, which belongs more to later-stage budgeting or procurement evaluation rather than the initial viability assessment.

2258-1_20CM3034001 Exam

Which factor is NOT typically included in a feasibility study?

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