Homework Help is Here – Start Your Trial Now!
Business
Operations Management
A real estate company, Peterson & Johnson, discusses five potential development projects. The following table shows the estimated long-term earnings (net present value) that each project would generate and the investment required to undertake it, in millions of dollars. Company owners Dave Peterson and Ron Johnson raised $20 million in investment capital for these projects. They want to choose the mix of projects that maximizes the total estimated long-term profit (net present value) without investing more than $20 million. a) Formulate a PEB model for this problem. b) Show the model in an Excel spreadsheet.

A real estate company, Peterson & Johnson, discusses five potential development projects. The following table shows the estimated long-term earnings (net present value) that each project would generate and the investment required to undertake it, in millions of dollars. Company owners Dave Peterson and Ron Johnson raised $20 million in investment capital for these projects. They want to choose the mix of projects that maximizes the total estimated long-term profit (net present value) without investing more than $20 million. a) Formulate a PEB model for this problem. b) Show the model in an Excel spreadsheet.

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
See similar textbooks
icon
Related questions
Question

A real estate company, Peterson & Johnson, discusses five potential development projects.
The following table shows the estimated long-term earnings (net present value) that each project would generate and the investment required to undertake it, in millions of dollars.
Company owners Dave Peterson and Ron Johnson raised $20 million in investment capital for these projects. They want to choose the mix of projects that maximizes
the total estimated long-term profit (net present value) without investing more than $20 million.

a) Formulate a PEB model for this problem.

b) Show the model in an Excel spreadsheet.

 

 

Estimated profit Required capital 1 1 6 Development 3 1.6 2 1.8 12 10 Project 4 0.8 4 5 1.4 00 8
Transcribed Image Text:Estimated profit Required capital 1 1 6 Development 3 1.6 2 1.8 12 10 Project 4 0.8 4 5 1.4 00 8
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps with 6 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Similar questions
Recommended textbooks for you
Practical Management Science
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
Operations Management
Operations Management
Operations Management
ISBN:
9781259667473
Author:
William J Stevenson
Publisher:
McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi…
Operations and Supply Chain Management (Mcgraw-hi…
Operations Management
ISBN:
9781259666100
Author:
F. Robert Jacobs, Richard B Chase
Publisher:
McGraw-Hill Education
Business in Action
Business in Action
Operations Management
ISBN:
9780135198100
Author:
BOVEE
Publisher:
PEARSON CO
Purchasing and Supply Chain Management
Purchasing and Supply Chain Management
Operations Management
ISBN:
9781285869681
Author:
Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:
Cengage Learning
Production and Operations Analysis, Seventh Editi…
Production and Operations Analysis, Seventh Editi…
Operations Management
ISBN:
9781478623069
Author:
Steven Nahmias, Tava Lennon Olsen
Publisher:
Waveland Press, Inc.
SEE MORE TEXTBOOKS