A firm is considering three projects: Project 1, project 2, and Project 3. Capital requirements and...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
A firm is considering three projects: Project 1, project 2, and Project 3. Capital requirements and budget limitations in the next three years prevent the firm from undertaking all of these at this time. The net present worth, the capital requirements, and the available funds for the next three years are summarized below: Capital requirements Year 2 $7,000 $8,000 $9,000 $20,000 Year 1 $6,000 $4,000 $5,000 Available funds $12,000 Project 1 Project 2 Project 3 Year 3 $5,500 $6,000 $1,500 $10,000 Net present Worth $22,000 $18,000 $21,000 a) The firm wants to maximize the net present worth of projects undertaken. Formulate the above problem using integer programming problem. b) The firm also would like to consider the following interrelationships among the projects regardless of the funds available : Limit number of selected projects to at most 2. Projects 2 cannot be selected unless both projects 1 and 3 are also selected. Projects 3 must be selected if both projects 1 and 2 are also selected. Represent the above three relationships mathematically. A firm is considering three projects: Project 1, project 2, and Project 3. Capital requirements and budget limitations in the next three years prevent the firm from undertaking all of these at this time. The net present worth, the capital requirements, and the available funds for the next three years are summarized below: Capital requirements Year 2 $7,000 $8,000 $9,000 $20,000 Year 1 $6,000 $4,000 $5,000 Available funds $12,000 Project 1 Project 2 Project 3 Year 3 $5,500 $6,000 $1,500 $10,000 Net present Worth $22,000 $18,000 $21,000 a) The firm wants to maximize the net present worth of projects undertaken. Formulate the above problem using integer programming problem. b) The firm also would like to consider the following interrelationships among the projects regardless of the funds available : Limit number of selected projects to at most 2. Projects 2 cannot be selected unless both projects 1 and 3 are also selected. Projects 3 must be selected if both projects 1 and 2 are also selected. Represent the above three relationships mathematically.
Expert Answer:
Related Book For
Taxes And Business Strategy A Planning Approach
ISBN: 9780132752671
5th Edition
Authors: Myron Scholes, Mark Wolfson, Merle Erickson, Michelle Hanlon
Posted Date:
Students also viewed these finance questions
-
Find the present value of Rs 1000 due in 12 years at 6% p.a. compound interest. (Given [1.06]12 = 2.012) A man can buy a flat for Rs 100,000 cash or for Rs 50,000 down and Rs 60,000 at the end of one...
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
The following additional information is available for the Dr. Ivan and Irene Incisor family from Chapters 1-5. Ivan's grandfather died and left a portfolio of municipal bonds. In 2012, they pay Ivan...
-
As mentioned in Section 5.6, Sainte-Venants principle will allow particular boundary conditions to be replaced by their statically equivalent resultant. For problems (b), (c), (d),and (f) in Exercise...
-
What is the marketing services system?
-
a) What are the four severity levels of incidents? b) What is the purpose of a CSIRT? c) From what parts of the firm do its members come? d) What is business continuity? e) Who should head the...
-
What do the terms lead and lag mean in the context of performance measures and why is this important?
-
To ensure a full line of outdoor clothing and accessories, the marketing department at Teddy Bower insists that they also sell waterproof hunting boots. Unfortunately, neither Teddy Bower nor Teddy...
-
1. As a tornado moves, its speed increases. The function S(d) = 93logd + 65 relates the speed of the wind, S, in miles per hour, near the centre of a tornado to the distance that the tornado has...
-
The following balances were taken from the book of JACK Partnership as of July 1, 2015 when the partnership decided to liquidate: Accounts Receivable, net Furniture & Fixtures, net Sales Proceeds...
-
(3) How much does country A export and import of goods 1 and 2? 2. ENDOWMENT MODEL Consider a world with two goods and many countries. Total world endowment of good 1 is 1000 units and of good 2 is...
-
Discuss how you see multiculturalism and diversity (e.g., race, religion, ethnicity) within a society having an influence on offender punishment. What implications do these insights have on your...
-
Summarize the six principles of Word-Of-Mouth (WOM) marketing . For each principle, explain what it means and why it works and then provide an example of how to use it for marketing purposes
-
If the goods intended to be transferred to a number of purchasers have been set aside for them, but their proportions have not specifically been identified: a.property in the goods passes to them if...
-
Kilimanjaro Company produces joint products Burigit, Ipot and Tubol, and by-products Brownish and Yellowis which have a joint cost of P1,287,300. Cost are assigned to joint products by Approximated...
-
In a video store, a DVD that sells for $15 is marked, "10% off". What is the discount? What is the sale price of the DVD? Solution: The rate is 10%. The discount is: 0.10 x $15.00 = $1.50 The sale...
-
9.On May 3, Zirbal Corporation purchased 5,500 shares of its ownstock for $49,500 cash. On November 4, Zirbal reissued 1,450 sharesof this treasury stock for $14,500. Prepare the May 3 and Novemb 2...
-
D Which of the following is considered part of the Controlling activity of managerial accounting? O Choosing to purchase raw materials from one supplier versus another O Choosing the allocation base...
-
True or False? Discuss. a. In a progressive tax rate system, risk neutral investors prefer volatile assets over riskless assets because they can average their tax rates. b. In a progressive tax rate...
-
What are the tax benefits of deferring income recognition in advance of a decline in statutory tax rates? What, if any, are the nontax costs?
-
Many large banks issued billions of dollars of trust preferred stock until the financial crisis of 2008. Why did banks more so than, say, manufacturing firms appear to like trust preferred stock as a...
-
____________ is the ability to control anothers behavior because of the possession of knowledge, experience, or judgment that the other person does not have but needs. (a) Coercive power (b) Expert...
-
The pattern of authority, influence, and acceptable managerial behavior established at the top of the organization is called ______________. (a) organizational governance (b) agency linkage (c) power...
-
The process by which managers help others to acquire and use the power needed to make decisions affecting themselves and their work is called ______________. (a) politics (b) managerial philosophy...
Study smarter with the SolutionInn App