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Compact case
Authors: Bob Bruner
Published by: Darden Business Publishing
Originally published in: 1992
Version: 01.1998

Abstract

This (B) case extends the analysis to one level higher, where the executive must choose between two mutually exclusive plant-renovation projects. NPV and IRR rank the projects differently, affording an opportunity to discuss the classic ''cross-over'' problem in capital-investment analysis. Operational flexibility is a significant factor, permitting a discussion of the role of real options in investment analysis. The last element is the political games playing as managers jockey for project approval.
Location:
Industry:
Size:
Large
Other setting(s):
1992

About

Abstract

This (B) case extends the analysis to one level higher, where the executive must choose between two mutually exclusive plant-renovation projects. NPV and IRR rank the projects differently, affording an opportunity to discuss the classic ''cross-over'' problem in capital-investment analysis. Operational flexibility is a significant factor, permitting a discussion of the role of real options in investment analysis. The last element is the political games playing as managers jockey for project approval.

Settings

Location:
Industry:
Size:
Large
Other setting(s):
1992

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