Rex Electric has decided to move into low-rise (2 to 8 floors) commercial building electrical wiring. After great success in upscale residential and small commercial wiring, they have identified four independent and indivisible investments, any or all of which will help make the move to the next level. Rex Electric's MARR is 10%, and $500,000 is available for investment immediately, with $175,000 available for follow-up investment the next year. The cash flows are shown below. ΕΟΥ CF(1) CF(2) CF(3) CF(4) 0 -$50,000 $125,000 $200,000 -$250,000 1 -$100,000 -$75,000 $50,000 $75,000 2 $50,000 $70,000 $50,000 $75,000 3 $50,000 $70,000 $50,000 $75,000 4 $50,000 $70,000 $50,000 $75,000 5 $50,000 $70,000 $75.000 $75,000 6 $50,000 $70,000 $75,000 $85.000 7 $50,000 $75,000 $70,000 $85,000 8. $50,000 $70.000 $75,000 $85,000 9 $50,000 $70,000 $75,000 $85,000 10 $75,000 $100,000 $75,000 $100,000 x Your answer is incorrect. Using SOLVER for sensitivity analysis: Determine the optimum portfolio and its PW using (1) the current limit on investment capital, (2) plus 20% to the year O limit, and (3) minus 20% to the year O limit. (1) PW: $ 130503 (2) PW: $ 184868 (3) PW: $ 181596

Rex Electric has decided to move into low-rise (2 to 8 floors) commercial building electrical wiring. After great success in upscale residential and small commercial wiring, they have identified four independent and indivisible investments, any or all of which will help make the move to the next level. Rex Electric's MARR is 10%, and $500,000 is available for investment immediately, with $175,000 available for follow-up investment the next year. The cash flows are shown below. ΕΟΥ CF(1) CF(2) CF(3) CF(4) 0 -$50,000 $125,000 $200,000 -$250,000 1 -$100,000 -$75,000 $50,000 $75,000 2 $50,000 $70,000 $50,000 $75,000 3 $50,000 $70,000 $50,000 $75,000 4 $50,000 $70,000 $50,000 $75,000 5 $50,000 $70,000 $75.000 $75,000 6 $50,000 $70,000 $75,000 $85.000 7 $50,000 $75,000 $70,000 $85,000 8. $50,000 $70.000 $75,000 $85,000 9 $50,000 $70,000 $75,000 $85,000 10 $75,000 $100,000 $75,000 $100,000 x Your answer is incorrect. Using SOLVER for sensitivity analysis: Determine the optimum portfolio and its PW using (1) the current limit on investment capital, (2) plus 20% to the year O limit, and (3) minus 20% to the year O limit. (1) PW: $ 130503 (2) PW: $ 184868 (3) PW: $ 181596

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter9: Decision Making Under Uncertainty

Section: Chapter Questions

Problem 30P

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