1. How does Victoria Chemicals evaluate its capital-expenditure proposals? Why is it such a complicated scheme?

2. What is the Transport Division’s suggestion? Does it have any merit?

3. What is the director of sales’ suggestion? Does it have any merit?

4. Why did the assistant plant manager offer his suggested change? Does it have any merit?

5. What did the analyst from the Treasury Staff mean by his comment about inflation? Do you agree with it?

6. How should Greystock modify his DCF analysis?

7. What is the Merseyside project worth to Victoria Chemicals?

These two cases present the capital-investment decisions under consideration by executives of a large chemicals firm in January 2008. The A case (UVA-F-1543) presents a go/no-go project evaluation regarding improvements to a polypropylene production plant. The B case (UVA-F-1544) reviews the same project but from one level higher, where the executive faces an either/or investment decision between two mutually exclusive projects. The objective of the two cases is to expose students to a wide range of capital-budgeting issues.