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Case
| HBS Case Collection
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1984
(Revised from original 1975 version)
Enzone Petroleum Corp.
by
Thomas R. Piper
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Abstract
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;
Equity;
Cost;
Risk and Uncertainty;
Competitive Strategy;
Valuation;
Budgets and Budgeting;
Transition;
Energy Industry;
Citation:
Piper, Thomas R. "Enzone Petroleum Corp." Harvard Business School Case 275-113, November 1984. (Revised from original April 1975 version.)