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Economic Feasibility Test

An economic feasibility test focuses on returns and costs of a proposed plan in both the short and long-term. An economic feasibility study (EFS) should consider investment and operating costs, the time value of money, risk and uncertainty, quality of available data, and the sensitivity of assumptions. An economic feasibility study should demonstrate the net benefit of the proposed course of action in the context of direct and indirect benefits and costs to the organization and to the general public as a whole. An EFS makes a business case, prepares analytical worksheets and other necessary supporting documentation. An EFS should be required for both pilot and long-term activities, plans and projects.

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