Case Discussion Diamond Chemicals Plc
Corporate Finance
Case Discussion : ‘Diamond Chemicals Plc (A)’
1. Purpose:
This case presents the capital investment decision under consideration by executives of a large chemicals firm in January 2001. This involves a go/no-go project evaluation regarding improvements to a polypropylene production plant.
A critical assessment of a capital investment evaluation system is the focus of this case. The case also enables discussion on conflicts of interest and other ethical dilemmas that may arise in investment decisions.
2. Issues for Analysis :
What changes, if any, should Lucy Morris ask Frank Greystock to make in his discounted cash flow (DCF) analysis? Why? What should Morris be prepared to say to the Transport Division, Director of Sales, her assistant palnt manager and the analyst from the Treasury Staff?
How attractive is the Merseyside project? By what criteria?
Should Morris continue to promote the project for funding?
Each group must provide their answers to each question and submit their answers within prescribed deadlines
3. Case Data :
An excel sheet with Exhibit 2 of the case is being provided to you for use
4. Assumptions:
The data provided in the case is comprehensive. However should any group feel the need to make any assumptions, these must be stated clearly in your submission. The appropriate justification for making assumptions must be provided.
5. Submission Deadline : After session 5. JANUARY 6TH 2015
6. Discussion date : Session 10. All students must be ready to present / explain their approach if called upon by the instructor. It is compulsory that each group be represented in class.
Case Discussion : ‘Diamond Chemicals Plc (A)’
1. Purpose:
This case presents the capital investment decision under consideration by executives of a large chemicals firm in January 2001. This involves a go/no-go project evaluation regarding improvements to a polypropylene production plant.
A critical assessment of a capital investment evaluation system is the focus of this case. The case also enables discussion on conflicts of interest and other ethical dilemmas that may arise in investment decisions.
2. Issues for Analysis :
What changes, if any, should Lucy Morris ask Frank Greystock to make in his discounted cash flow (DCF) analysis? Why? What should Morris be prepared to say to the Transport Division, Director of Sales, her assistant palnt manager and the analyst from the Treasury Staff?
How attractive is the Merseyside project? By what criteria?
Should Morris continue to promote the project for funding?
Each group must provide their answers to each question and submit their answers within prescribed deadlines
3. Case Data :
An excel sheet with Exhibit 2 of the case is being provided to you for use
4. Assumptions:
The data provided in the case is comprehensive. However should any group feel the need to make any assumptions, these must be stated clearly in your submission. The appropriate justification for making assumptions must be provided.
5. Submission Deadline : After session 5. JANUARY 6TH 2015
6. Discussion date : Session 10. All students must be ready to present / explain their approach if called upon by the instructor. It is compulsory that each group be represented in class.