What is the total net present value of these projects? Total net present value

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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D2.

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Your employer is trying to select from a list of possible capital projects. The projects, along with their cost and benefits, are
listed below. The capital budget available is $1 million. In addition to spending constraints, your employer would like to
select at least 3 projects. Projects 3 and 5 cannot both be selected together. Formulate the problem as a linear program
and determine the optimal solution.
Project
1
2
3
4
5
Cost
$200,000
$240,000
$300,000
$220,000
$280,000
Net Present Value
$700,000
$720,000
$600,000
$570,000
$620,000
Transcribed Image Text:Your employer is trying to select from a list of possible capital projects. The projects, along with their cost and benefits, are listed below. The capital budget available is $1 million. In addition to spending constraints, your employer would like to select at least 3 projects. Projects 3 and 5 cannot both be selected together. Formulate the problem as a linear program and determine the optimal solution. Project 1 2 3 4 5 Cost $200,000 $240,000 $300,000 $220,000 $280,000 Net Present Value $700,000 $720,000 $600,000 $570,000 $620,000
What is the total net present value of these projects?
Total net present value
Transcribed Image Text:What is the total net present value of these projects? Total net present value
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