Project Identification Stage

We have seen that the first stage of a project cycle is the project idea stage. The second stage of a project is the project identification stage. Project ideas are not usually very useful except they are clearly identified and put down in a manner that will make them amenable for further processing. When a project idea is introduced into a company, the board will be expected to clearly identify the project and present it for further discussions and analysis.

Project Evaluation Stage

After a project has been identified, the next stage is the project evaluation stage. The project evaluation stage is a very important stage of a project cycle. This stage is a very crucial aspect of this course.Project Evaluation in the real sense involves the examination of the benefits and costs attached to a project.
Generally, the benefits and costs of a project are measured in terms of what is known as cash flows.

In a standard project evaluation situation, the evaluation of cash flows is not an easy task. This is so because cash flows are very difficult to estimate because they are generally uncertain. It is this uncertainty about cash flows that makes its evaluation difficult. The future is very uncertain and unpredictable