How will the top management team at a Paris-based confectioner allocate a predetermined capital expenditure budget over several prospective projects?
How will the top management team at a Paris-based confectioner allocate a predetermined capital expenditure budget over several prospective projects?
The top management team at Paris-based Chocolat Cordon Rouge (CCR) is considering how to allocate a predetermined capital expenditure (capex) budget of $75 million. Although some projects may involve capital expenditures over a two-year period, the budget decision must be made this year. This case outlines the seven projects under consideration and the cash flow estimates associated with each.