| HBS Case Collection
(Revised from original 1975 version)
Enzone Petroleum Corp.
A large integrated oil company is debating whether to switch from a single hurdle rate to multiple hurdle rates for project analysis purposes. Raises questions on: 1) determination of the cost of equity; 2) the usefulness of multiple hurdle rates to adjust for project risk; 3) differences between a project's risk and its impact on overall corporate risk; and 4) the limitations of project analysis and capital budget systems.
Keywords: Investment Return;
Risk and Uncertainty;
Budgets and Budgeting;
Piper, Thomas R. "Enzone Petroleum Corp." Harvard Business School Case 275-113, November 1984. (Revised from original April 1975 version.)