Question: Victoria case project What changes, if any, should Lucy Morris ask Frank Greystock make in his discounted cash flow (DCF) analysis? Why? What should Morris

Victoria case project

What changes, if any, should Lucy Morris ask Frank Greystock make in his discounted cash flow (DCF) analysis? Why? What should Morris be prepared to say to the Transport Division, the director of sales, and her assistant plant manager?

Please decide what to do with the relevant cash flows and, in particular, the treatment of the following:

a.sunk costs

b.cash flows obtained by cannibalizing another activity within the firm

c.exploitation of excess transportation capacity

d.corporate overhead allocations

e.cash flows of unrelated projects

f.should you take in to account inflation

Explain your decision based on finance fundamentals.

1.How attractive is the Merseyside project? By what criteria?

2.Should Morris continue to promote the project for funding?

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