Diamond Chemicals PLC B Solution: The Merseyside Project Case Solution Introduction: Diamond Chemicals PLC B Solution

Diamond Chemicals PLC B Solution: The Merseyside Project Case Solution

Introduction: Diamond Chemicals PLC B Solution

Diamond Chemicals, a large chemical company in the United Kingdom, has two major projects to consider: The Merseyside project and the Rotterdam project. The Merseyside project is a £9 million investment in a plant renovation and modernization to improve production efficiency and reduce costs. The Rotterdam project is a €12 million investment in a new plant with the latest technology to produce polypropylene. In this case analysis, we will be discussing the Merseyside project in two parts – (A) and (B). In the A case, we will evaluate the project’s attractiveness, make modifications to the DCF analysis, and determine if Morris should continue to promote the project for funding. In the B case, we will compare the Merseyside and Rotterdam projects on various investment criteria, evaluate the value of managerial flexibility, and decide which project James Fawn should propose to the CEO and board of directors.