The book isn't in your list. but here's the question:Perry Enterprises is considering a number of investment possibilities. Specifically, each investment under consideration will draw on the capital account during each of its first three years, but in the long run, each is predicted to achieve a positive net present value (NPV). Listed are the investment alternatives, their net present values, and their capital requirements, and all figures are in thousands of dollars. In addition, the amount of capital available to the investments in each of the next three years is predicted to be $9.5 million, $7.5 million, and $8.8 million, respectively.(It shows a chart that I attached in the images)For the model, I am unsure of how the constraints are supposed to be applied. Do I have to purchase the investment for all three years if I choose to invest in that investment or can I choose to only invest in it one or two years? If I invest in it more than one year, do I still only recieve the NPV one time? ### Investment Choice Analysis for Perry EnterprisesPerry Enterprises is evaluating several investment options that will impact their financial strategy over the next three years. The primary metric for assessment is the Net Present Value (NPV) of each investment over the long term. Below is a summary of the investment alternatives, their respective NPV, and capital requirements. All figures are presented in thousands of dollars.#### Investment Options and Financial Metrics| Project | NPV | Year 1 Capital | Year 2 Capital | Year 3 Capital ||----------------------|-----|----------------|----------------|----------------|| **One-Phase Expansion** | 4,200 | 3,000 | 1,000 | 4,000 || **Two-Phase Expansion** | 6,800 | 2,500 | 3,500 | 3,500 || **Test Market** | 6,000 | 2,500 | 2,000 | 5,000 || **Advertising Campaign** | 4,400 | 800 | 1,500 | 5,000 || **Basic Research** | 8,700 | 5,000 | 5,000 | 4,000 || **Purchase Equipment** | 3,500 | 3,500 | 1,000 | 900 |#### Available Capital for Investment- **Year 1:** $9.5 million- **Year 2:** $7.5 million- **Year 3:** $8.8 million#### Analysis Questionsa. **Maximizing NPV:** Which combinations of investments should Perry Enterprises pursue to maximize NPV while adhering to capital constraints?b. **Optimal NPV Calculation:** Based on your strategy in (a), calculate the optimal NPV.c. **Exclusive Investments:** If expansion options are mutually exclusive, how would this impact the investment strategy and NPV?d. **Dependency on Test Markets:** Evaluate the impact on the advertising campaign strategy if the test market cannot be implemented.**Note:** This strategic financial planning is crucial for effectively allocating resources and maximizing shareholder value in the long term.

Based on the NPV return on capital employed, we can see the last 3 projects are better, adding more…

Answered: The book isn't in your list. but here's…

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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The book isn't in your list. but here's the question:

Perry Enterprises is considering a number of investment possibilities. Specifically, each investment under consideration will draw on the capital account during each of its first three years, but in the long run, each is predicted to achieve a positive net present value (NPV). Listed are the investment alternatives, their net present values, and their capital requirements, and all figures are in thousands of dollars. In addition, the amount of capital available to the investments in each of the next three years is predicted to be $9.5 million, $7.5 million, and $8.8 million, respectively.

(It shows a chart that I attached in the images)

For the model, I am unsure of how the constraints are supposed to be applied. Do I have to purchase the investment for all three years if I choose to invest in that investment or can I choose to only invest in it one or two years? If I invest in it more than one year, do I still only recieve the NPV one time?