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 2 projects. Projects 1 and 5 cannot both be selected together. Formulate the problem as a linear program and determine the optimal solution. Project Cost Net Present Value 1 $205,000 $600,000 2 $285,000 $620,000 3 $280,000 $540,000 4 $260,000 $790,000 5 $235,000 $400,000 Which projects should be selected? What is the total net present value of these projects?
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 2 projects. Projects 1 and 5 cannot both be selected together. Formulate the problem as a linear program and determine the optimal solution. Project Cost Net Present Value 1 $205,000 $600,000 2 $285,000 $620,000 3 $280,000 $540,000 4 $260,000 $790,000 5 $235,000 $400,000 Which projects should be selected? What is the total net present value of these projects?
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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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 2 projects. Projects 1 and 5 cannot both be selected together. Formulate the problem as a linear program and determine the optimal solution.
| Project | Cost | |
| 1 | $205,000 | $600,000 |
| 2 | $285,000 | $620,000 |
| 3 | $280,000 | $540,000 |
| 4 | $260,000 | $790,000 |
| 5 | $235,000 | $400,000 |
Which projects should be selected?
What is the total net present value of these projects?
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