CustomMetalworks is considering expanding their cable fabrication business for towers, rigging, winches, and many other uses. They have available \(\$ 250,000\) for investment and have identified the following indivisible alternatives, each of which will provide an exit with full return of the investment at the end of a 5-year planning horizon. Each year, CustomMetalworks will receive an annual return as noted below. MARR is 12 percent.

For the original problem:

a. Which alternatives should CustomMetalworks select?

b. What is the present worth for the optimum investment portfolio?

c. What is the IRR for the optimum investment portfolio?
In addition to the original opportunity statement, CustomMetalworks has determined that Investments 3 and 4 are mutually exclusive and that Investment 5 is contingent on either Investment 1 or 2 being funded.

d. Now, which alternatives should be selected?

e. What is the present worth for the optimum investment portfolio?

f. What is the IRR for the optimum investment portfolio?
Reconsider the original problem using SOLVER for sensitivity analysis:
g. Determine the optimum portfolio (state the investments selected and the portfolio PW) using (1) the current limit on investment capital, (2) plus 20 percent, and (3) minus 20 percent.
h. Determine the optimum portfolio (state the investments selected and the portfolio PW) using (1) the current MARR, (2) plus 20 percent, and (3) minus 20 percent.

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Investment 1 2 3 4 5 Initial Investment | $25,000 $40,000 $85,000 $100,000 $65,000 Annual Return $7.500 $12,000 $20,000 $22,000 $17,000