the ability of a proposed land use or change of land use to justify itself from an economic point of view. Financial feasibility is one test of the highest and best use of land, but not the only test. Nor does the financial feasibility of a project make it the most rewarding use of the land.
the ability of a proposed land use or change of land use to justify itself from an economic point of view. Financial feasibility is one test of the highest and best use of land, but not the only test. Nor does the financial feasibility of a project make it the most rewarding use of the land.
Example: A proposed small office building will cost $1 million to build, including direct costs and indirect costs. It is expected to generate $150,000 in annual Net Operating Income. Building investors require a 12% rate of return on the $1 million investment, or $120,000, so this project is financially feasible because it is expected to generate more Net Operating Income (NOI) than the 12% requirement.
