The Jacobs Division 2010 - The Case Centre

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Case

Reference no. UVA-F-0243

Subject category: Finance, Accounting and Control

Authors: Robert M Conroy (Darden School of Business, University of Virginia); Robert F Vandell (Darden School of Business, University of Virginia); Diana Harrington (Darden School of Business, University of Virginia)

Published by: Darden Business Publishing

Originally published in: 2003

Version: 12 April 2013

Revision date: 7-May-2013

Length: 9 pages

Data source: Published sources

Topics: Capital budgeting; Budget cost; Discount rates; Finance: Capital budgeting; Corporate finance; Cost of capital; Real options; Valuation; Finance

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Abstract

This case examines the capital budgeting framework used in a large specialty chemical company. It presents the reader with issues related to using multiple discount rates to examine projects and how compensation policies can impact on managerial actions. A second use of the case is to introduce project-related real options.

Industry:

Chemicals