Financial and economic appraisal is an important component of any project.   Increasing awareness about the use of scare resources and the returns obtainable from it makes the issue more important.  Financial analysis is used to describe the commercial viability of the project and shows its strength from financial angle.  The concept of economic analysis can be considered as an extension of the financial analysis.  In economic analysis the concern is on the developmental effect on the society, economy as a whole as against the financial analysis that bothers the interest of the specific entity.  In the absence of past trends and its proper records it is necessary to make certain assumptions based on the reality of situations for assessing the true viability of the project.