Victoria Chemicals Plc B Merseyside And Rotterdam Projects
hese two cases to consider the investment decisions of managers of large chemical companies are made in January 2001. The A ‘case, a go / no-go project evaluation regarding improvements to a polypropylene production plant. The B ‘case, checked the same project, but from a higher level, where the executive is an either / or investment decision between two mutually exclusive projects. The goal of the two cases is to expose students to a broad range of capital budgeting … Read more »
These two cases to consider the investment decisions of managers of large chemical companies are made in January 2001. The A ‘case, a go / no-go project evaluation regarding improvements to a polypropylene production plant. The B ‘case, checked the same project, but from a higher level, where the executive is an either / or investment decision between two mutually exclusive projects. The goal of the two cases is to expose students to a broad range of capital budgeting issues, which include, among other things, the identification of relevant cash flows, the critical assessment of a capital-investment rating system, the classic “cross-over” problem in the project agree rankings based on the net present value (NPV) and internal rate of return (IRR). his is an analysis of the two discounted cash flows that will be used in summarizing the financial impact that this capital improvement to the polypropylene line will have on the Rotterdam business volume. The difference in the cash flow is brought by the adjustment of the cannibalization effect that is experienced when erosion is done at the Rotterdam business to aid in improving the polypropylene line. The investment cost as attached to the memo is 12 million sterling pounds. The analysis on the net present value of both the situations will be carried out to determine the impact of carrying out the erosion. The case presented here reflects two scenarios (Belli, Anderson, Barnum, Dixon and Tan, 2001).
The first scenario involves the
These two cases to consider the investment decisions of managers of large chemical companies are made in January 2001. The A ‘case, a go / no-go project evaluation regarding improvements to a polypropylene production plant. The B ‘case, checked the same project, but from a higher level, where the executive is an either / or investment decision between two mutually exclusive projects. The goal of the two cases is to expose students to a broad range of capital budgeting issues, which include, among other things, the identification of relevant cash flows, the critical assessment of a capital-investment rating system, the classic “cross-over” problem in the project agree rankings based on the net present value (NPV) and internal rate of return (IRR). his is an analysis of the two discounted cash flows that will be used in summarizing the financial impact that this capital improvement to the polypropylene line will have on the Rotterdam business volume. The difference in the cash flow is brought by the adjustment of the cannibalization effect that is experienced when erosion is done at the Rotterdam business to aid in improving the polypropylene line. The investment cost as attached to the memo is 12 million sterling pounds. The analysis on the net present value of both the situations will be carried out to determine the impact of carrying out the erosion. The case presented here reflects two scenarios (Belli, Anderson, Barnum, Dixon and Tan, 2001).
The first scenario involves the