Feasibility Study

### What does a feasibility study determine? - [x] The likelihood that a proposed development will fulfill investors' objectives - [ ] The minimum price at which properties should be sold - [ ] How to avoid all legal responsibilities - [ ] The exact price of future properties > **Explanation:** A feasibility study focuses on determining the likelihood that a proposed development will be successful and fulfill the objectives of its investors. ### Does a feasibility study consider the potential profitability of a project? - [x] Yes, it examines potential returns and profitability. - [ ] No, it only looks at market conditions. - [ ] No, it only focuses on legal considerations. - [ ] Yes, but only in terms of potential rental income. > **Explanation:** A feasibility study considers potential profitability along with market demand, project costs, and risks. ### Which of the following is not typically included in a feasibility study? - [ ] Cash flow forecasts - [ ] Market demand estimation - [ ] Legal considerations - [x] Detailed interior design schemes > **Explanation:** A feasibility study generally does not include detailed interior design schemes; it focuses more on market demand, legal aspects, financial viability and overall project feasibility. ### What key metric does a feasibility study evaluate to measure demand? - [ ] Rental prices - [x] Absorption rate - [ ] Interest rates - [ ] Property age > **Explanation:** The absorption rate measures how quickly available properties are expected to be sold or leased, making it a critical metric in a feasibility study. ### What document is primarily focused on evaluating market potential, not overall profitability? - [ ] Feasibility study - [x] Marketability study - [ ] Site assessment report - [ ] Risk analysis report > **Explanation:** A marketability study evaluates the market potential without delving into the overall profitability of the project. ### Who typically benefits most directly from the information in a feasibility study? - [ ] Local government bodies - [x] Investors and developers - [ ] Community members - [ ] Real estate agents > **Explanation:** Investors and developers most directly benefit from a feasibility study as it helps them decide whether or not to proceed with the project. ### What is a crucial factor to conclude a feasibility study which involves the population’s response? - [ ] Mortgage options - [ ] Insurance plans - [ ] Subdivision plans - [x] Market demand > **Explanation:** Market demand is a crucial factor as it assesses how the population is expected to respond to the new development. ### What would a feasibility study likely not address extensively? - [ ] Legal hurdles - [ ] Construction costs - [ ] Environmental impact - [x] Specific leasing contracts > **Explanation:** While a feasibility study might briefly touch on leasing strategies, it does not typically address specific leasing contracts in detail. ### Can a feasibility study be beneficial for projects other than real estate? - [x] Yes, it can be applied to various types of projects. - [ ] No, it is exclusive to real estate. - [ ] Sometimes, but only for very large projects. - [ ] Only for commercial real estate projects. > **Explanation:** Feasibility studies can be applied to a wide array of projects across many industries to determine their viability. ### What term refers to the rate at which properties in a specific area are sold or leased? - [ ] Market rate - [ ] Occupancy rate - [ ] Capitalization rate - [x] Absorption rate > **Explanation:** The absorption rate refers to the rate at which properties are sold or leased in a specific area and is frequently evaluated in feasibility studies.