What is the purpose of a financial feasibility study?

The purpose of a financial feasibility study is to determine if a capital project is financially viable. It assesses various financial aspects of a project, including costs, revenues, funding sources, and potential financial risks. By examining these components, stakeholders can make informed decisions on whether to move forward with the project based on its anticipated financial performance. The study provides a thorough analysis that helps ensure adequate financial planning, aiming to identify any barriers to successful funding and implementation. This analysis is crucial for making investment decisions and validating the project's alignment with organizational goals and resources.

The other options, while related to project assessments, do not encapsulate the primary focus of a financial feasibility study. Finalizing the recipients of funding pertains more to the distribution of resources rather than evaluating financial viability. Analyzing competitor spending relates to market research, which is not the main aim of a financial feasibility study. Assessing environmental impacts falls under sustainability and regulatory compliance evaluations rather than financial considerations. Therefore, the correct answer directly reflects the essential purpose of this type of study in the capital planning process.