This Case is about COSTS
PUBLICATION DATE: October 10, 2001 PRODUCT #: UV2493-PDF-ENG
The case study is focusing on the executives of big companies in January 2001 who make the capital investment decisions. The go/no-go project assessment is present in the case “A” that involve progress of a production plant of polypropylene. On the other hand, same project assessment is present in the case “B” reviews the same job. However, it is one degree higher than previous one, where the executive confronts that whether to make investment decision between two mutually exclusive endeavors or not.
The purpose of both instances would be to expose students to an extensive array of capital budgeting problems that contains the identification of related cash flows. The critical appraisal of a capital investment evaluation process include the classic “crossover” issue in which projects ranks differ on the basis of internal rate of return and net present value, as well as the appraisal of actual decision value hidden in managerial flexibility in order to alter by using technologies.