TN20 Diamond Chemicals PLC A And B

Decision Making Area 3:Investment Decisions * Table of Articles * Summary of Articles * Observations * Conclusion

This decision may be the result of a conservative policy pursued by a firm. Restriction may be imposed on divisional heads on the total amount that they can commit on new projects.Another internal restriction for capital budgeting decision may be imposed by a firm based on the need to generate a minimum rate of return. Under this criterion only projects capable of generating the management’s expectation on the rate of return will be cleared.

This document was prepared by Frances Tuer and edited by Jacqueline Glenney and Michael Robertson. It was designed to help students in MGMT 1P96 understand the case analysis process.

There are also many economists who would agree with the claim that zero inflation is the optimal rate of inflation. This claim employs

Proof of Student Ideas: I will quote the student, explain their misconceptions and link findings to relevant academic literature.

This task request will be focussed on providing input for the development of Inflation Working Paper (WP) currently in draft phase. The recent version of the WP is attached for your reference purpose only.

In this assignment you will demonstrate your understanding of capital investment techniques by evaluating the following three case studies.

Due to this realization, the next thing he did was to talk to the plant’s accountants to determine how the company can make money. The company will have money if the net profit increased along with the return on

The Merseyside project clearly provides a superior return to the Rotterdam project based on the profit, cash flow and payback criteria. In addition, the positive net

Virtually all general managers face capital-budgeting decisions in the course of their careers. Among the most common of these is the either/or choice about a capital investment. The following describes some general guidelines to orient the decision-maker in these situations.

This case study analyzed five different projects Target Corporation had to decide on capital spent for which project created the most value and the most growth for the company and its shareholders. By analyzing the financial statements and exhibits of each project, I was able to determine the positives and negatives of each of these alternatives. The alternatives were Gopher Place, Whalen Court, The Barn, Goldie’s Square, or Stadium Remodel.

Overall, we have decided that the Merseyside project should be accepted based on the achievement of Diamond Chemicals decision criteria. The project produces a positive NPV of €6.07, holds an IRR greater than their cost of capital at 21.4%, has a payback period less than 6 years at 5.71 years, and adds to earnings per share by generating an extra £.0203 per share. This project satisfies all 4 decision criteria requirements, making Morris’s choice easy in deciding to continue funding the project. Lucy Morris and Diamond Chemicals should go forward with the Merseyside project.

1) Compare and contrast the new plant to the old in terms of work design. Identify and rank order the most challenging problems and describe possible solutions.

Purpose of Meeting: To make capital budgeting decision with respect to the introduction and production of a new product, a liquid detergent called Blast. Need to consider what types and which cash flows should be included in capital budgeting analysis.

Assistant Plant Manager: Although the Assistant Plant Manager made a few good points about EPC, I agree with the executive committee on the refusal to accept the EPC project. Due to the economic grounds of this project there isn’t a way that you could be able to make this happen, especially with the recession. Along with that, because it has a negative NPV it is not a wise decision to make even if you add it to the polypropylene line renovations. Although the improved cash flow would be great, the executive committee is correct on rejecting the project.