What is a common purpose of conducting feasibility studies during predevelopment?

A common purpose of conducting feasibility studies during predevelopment is to evaluate the economic viability of a project. Feasibility studies analyze various factors that influence whether a project will be financially successful or sustainable in the long term. This includes assessing market demand, estimating costs, analyzing potential revenues, and identifying financial risks. By conducting a thorough feasibility study, developers can make informed decisions about whether to proceed with a project based on its economic potential.

The economic viability assessment is essential as it helps to reduce the risk of financial loss. It provides developers with insights into the necessary investments and whether the expected returns justify those investments, thereby serving as a foundational element of project planning and risk management. Through this evaluation, developers can determine if their project aligns with market conditions and community needs.

The other options, while relevant to different aspects of the development process, do not capture the primary focus of feasibility studies in the same way. Zoning laws and community feedback are crucial but typically addressed separately from the financial analysis that defines economic viability. Finalizing contracts is a later stage in the development process that occurs after the feasibility and viability of the project have been established.