What does a financial appraisal specifically assess?

A financial appraisal is primarily focused on evaluating the monetary aspects of a project or investment. It specifically assesses current nominal prices and cash releasing benefits because it involves analyzing the expected financial returns from the project in comparison to its costs. This includes forecasting revenues, understanding cost implications, and determining the net present value of future cash flows.

By focusing on current nominal prices, the financial appraisal provides insight into the immediate financial viability of a project, allowing decision-makers to understand how cash flows are expected to contribute to the organization’s financial position. The emphasis on cash releasing benefits helps to identify how soon and how much the project will contribute positively to cash flow, which is vital for operational sustainability and funding future investments.

The other options, while relevant to broader assessments of projects, do not specifically pertain to the financial appraisal's main objective. For instance, market demand for services relates to market research rather than direct financial evaluation, opportunity costs pertain to resource allocation decisions, and long-term social impacts fall under social appraisal or societal benefits analysis rather than the specific financial metrics.