Could you please answer those questions for FIN case 24 Victoria Chemicals

Case 24-Victoria Chemicals 1. In your view, should the previously completed engineering study be included as a component of the project cash flows? Why or why not? what about the annual 3.5% of intial cost corporate overhead charge? 7 2 2. One of the consequences of the Merseyside rennovation would be that the Transport Divsion would have to spend $2.0 million to purchase some new tank cars two years earlier than they would otherwise have to without the rennovation project. Explain why you would or would not include this impact of moving forward by two years the $2.0 million purchase of new railroad tank cars. How would you show that in the cash flows? 2 3. What is your view of the argument that lost production (if any) at the Rotterdam plant should negatively impact the value of the proposed rennovation program at Merseyside? Assuming that Merseyside is rennovated. if it's true that both plants are not able to run a full capacity, which one would you recommend to cut back its production volume? 4. What was the Treasury's staff comment about inflation? Specifically, how would you handle their suggestion? 5. What were some of the key assumptions for which sensistivity analysis was warranted? 6. Would you recommend moving forward with the Merseyside project? Why or why not? 2 Case 24-Victoria Chemicals 1. In your view, should the previously completed engineering study be included as a component of the project cash flows? Why or why not? what about the annual 3.5% of intial cost corporate overhead charge? 7 2 2. One of the consequences of the Merseyside rennovation would be that the Transport Divsion would have to spend $2.0 million to purchase some new tank cars two years earlier than they would otherwise have to without the rennovation project. Explain why you would or would not include this impact of moving forward by two years the $2.0 million purchase of new railroad tank cars. How would you show that in the cash flows? 2 3. What is your view of the argument that lost production (if any) at the Rotterdam plant should negatively impact the value of the proposed rennovation program at Merseyside? Assuming that Merseyside is rennovated. if it's true that both plants are not able to run a full capacity, which one would you recommend to cut back its production volume? 4. What was the Treasury's staff comment about inflation? Specifically, how would you handle their suggestion? 5. What were some of the key assumptions for which sensistivity analysis was warranted? 6. Would you recommend moving forward with the Merseyside project? Why or why not? 2