How attractive is the merseyside project

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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.

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

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

Reference no: EM132948889

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