flows; in particular‚ the treatment of: a. sunk costs b. cash flows obtained by cannibalizing another activity within the firm c. exploitation of excess transportation capacity d. corporate overhead allocations e. cash flows of unrelated projects f. inflation. 2. The critical assessment of a capital-investment evaluation system. 3. The treatment of conflicts of interest and other ethical dilemmas that may arise in investment decisions. Suggested Questions 1. What changes‚ if any
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from medical products to packaging film‚ carpet fibers and automotive components) and is known for its strength and elasticity. Diamond Chemicals is producing polypropylene at Merseyside (England) and in Rotterdam (Netherlands). Both factories are identical in size‚ age and plant-design. They were both built in 1967. Merseyside production process is the production process that are old‚ the best semi-continuous and therefore has a total workforce of more than the plant competitors. Since its establishment
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The Merseyside Project The objective of this report is to demonstrate to the senior management of Diamond Chemicals PLC that sufficient capital should be allocated for the proposed £9 million expenditure to renovate and rationalize the polypropylene production line at the Merseyside Plant. The Merseyside Plant is aging and therefore it is losing its competitiveness relative to some of its industry peers. Because the industry is in a downturn and “an oversupply is in the works‚” Merseyside plant
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Case Report Diamond Chemicals plc. : The Merseyside Project Introduction The goal of this report is to analyze and evaluate the capital budgeting decision of Ms. Morris and suggestion to the senior management of Diamond Chemicals PLC if sufficient capital should be allocated for the proposed £12 million expenditure to modernize and rationalize the polypropylene production line at the Merseyside Plant. The project has been proposed to improve the product output
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fibers‚ packaging‚ automobile parts to the customers in Europe and the Middle East. Apart from numerous small producers‚ the company also receives the threats from the other seven major competitors. The company owns two plants in Europe‚ one being Merseyside Works‚ England and Rotterdam Facility‚ Holland. Both plants were built in 1967 and are identical in scale and design. James Fawn‚ the Vice President and Manager of Intermediate Chemicals Group‚ is in charge of both plants. Problems In the year
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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
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Question Presented Whether Sherman‚ under the attractive nuisance doctrine‚ will likely prevail against Carlisle for multiple injuries he sustained in a fall from wooden steps of a tree house in disrepair while trespassing upon Carlisle’s property when: (1) Carlisle was aware that the neighborhood surrounding his property was populated with children; (2) a severe storm had damaged Carlisle’s property and exposed the previously concealed tree house; (3) Sherman was six years of age at the time of
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Attractive Industries Michael Porter’s Five Force Model is one of today’s leading models on how certain forces that arise within industries creates change in both a negative and positive aspects. Many executives use his model to analyze the different industries and see where there may be a potential star performers and utilize their current company’s capabilities and resources to enter that new industry in a successful manner (Daft‚ 2007). His model can also help companies move into other market
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Eating Disorders and the Pressure to be Attractive In today’s society many people strive to have the “model” attractiveness‚ a skinny body and gorgeous face. Many men and women want to obtain by taking completely unhealthy and sometimes life-threatening measures. Thus‚ eating disorders‚ among other things‚ are formed. Of the eating disorders one can acquire‚ anorexia nervosa is one of the most common (Lonegran et al. 1). Western societies’ emphasis on appearance pressures many men and women to
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Manager of Diamond Chemicals Merseyside was discussing a capital project with her controller that Morris wanted to propose to senior management. The project consisted of a 9 million pounds expenditure to renovate and rationalize the polypropylene production line at the Merseyside plant in order to make up for the deferred maintenance and to exploit opportunities to achieve production efficiency. The proposed Capital Program Morris had assumed responsibility for the Merseyside works only 12 months previously
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