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 3 and 4 cannot both be selected together. Formulate the problem as a linear program and determine the optimal solution. 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 3 and 4 cannot both be selected together. Formulate the problem as a linear program and determine the optimal solution. Project Net Present Value Cost 1 $280,000 2 $235,000 3 $285,000 4 $200,000 5 $205,000 $680,000 $720,000 $570,000 $410,000 $550,000 Which projects should be selected? Project 1 will be selected Project 2 will be selected Project 3 will not be selected Project 4 will be selected Project 5 will be selected What is the total net present value of these projects? Total net present value

Financial Management: Theory & Practice
16th Edition
ISBN:9781337909730
Author:Brigham
Publisher:Brigham
Chapter11: Cash Flow Estimation And Risk Analysis
Section: Chapter Questions
Problem 7MC: Calculate the project cash flows for each year. Based on these cash flows and the average project...
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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 3 and 4 cannot both be selected together. Formulate the problem as a linear
program and determine the optimal solution. 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 3 and 4 cannot both be selected together. Formulate the problem as a linear program and determine the optimal
solution.
Project
Net Present Value
Cost
1
$280,000
2
$235,000
3
$285,000
4
$200,000
5
$205,000
$680,000
$720,000
$570,000
$410,000
$550,000
Which projects should be selected?
Project 1 will
be selected
Project 2 will
be selected
Project 3 will
not be selected
Project 4 will
be selected
Project 5 will
be selected
What is the total net present value of these projects?
Total net present value
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 2 projects. Projects 3 and 4 cannot both be selected together. Formulate the problem as a linear program and determine the optimal solution. 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 3 and 4 cannot both be selected together. Formulate the problem as a linear program and determine the optimal solution. Project Net Present Value Cost 1 $280,000 2 $235,000 3 $285,000 4 $200,000 5 $205,000 $680,000 $720,000 $570,000 $410,000 $550,000 Which projects should be selected? Project 1 will be selected Project 2 will be selected Project 3 will not be selected Project 4 will be selected Project 5 will be selected What is the total net present value of these projects? Total net present value
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