Question 2: Spencer Enterprises is attempting to choose among a series of new investment alternatives. The potential investment alternatives, the net present value of the future stream of returns, the capital requirements, and the available capital funds over the next three years are summarized as follows: Alternative Limited warehouse expansion Extensive warehouse expansion Test market new product Advertising campaign Basic research Purchase new equipment Capital funds available Net Present Value ($) Year 1 Year 2 Year 3 3000 1000 4000 2000 1500 1800 2500 3500 3500 6000 4000 5000 5000 1000 4000 1000 500 900 10500 7000 8750 4000 6000 10500 4000 8000 3000 (a) Develop and solve an optimization model for maximizing the net present value. (b) Assume that only one of the warehouse expansion projects can be implemented. How do you model this restriction?

Question 2: Spencer Enterprises is attempting to choose among a series of new investment alternatives. The potential investment alternatives, the net present value of the future stream of returns, the capital requirements, and the available capital funds over the next three years are summarized as follows: Alternative Limited warehouse expansion Extensive warehouse expansion Test market new product Advertising campaign Basic research Purchase new equipment Capital funds available Net Present Value ($) Year 1 Year 2 Year 3 3000 1000 4000 2000 1500 1800 2500 3500 3500 6000 4000 5000 5000 1000 4000 1000 500 900 10500 7000 8750 4000 6000 10500 4000 8000 3000 (a) Develop and solve an optimization model for maximizing the net present value. (b) Assume that only one of the warehouse expansion projects can be implemented. How do you model this restriction?

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...

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