The city of Clyde, Ohio, is using the binary linear programming (BLP) formulation of a capital budgeting problem shown below. Assume \(\$ 175,000\) is available for investment and all investments are indivisible; MARR is 12 percent and \(n=10\) years. Given the incomplete SOLVER parameter box shown, respond to Parts a-f below if it is desired to obtain an optimum investment portfolio.

a. Specify the contents of the target cell.

b. Specify the contents for "By Changing Cells:"

c. Specify all constraints to be added.

d. Now, suppose the original problem is modified so that Investments 1 and 2 are mutually exclusive. Show how you would incorporate that constraint in SOLVER.

e. Now, suppose the original problem is modified so Investment 2 is contingent on Investment 3 being pursued. Show how you would incorporate that constraint in SOLVER.

f. Now, suppose the original problem is modified to specify that at least three and no more than four investments can be pursued. Show how you would incorporate that constraint in SOLVER.

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B D E F G H 2 LINEAR PROGRAMMING FORMULATION FOR A CAPITAL BUDGETING PROBLEM 3 INVESTMENT OPPORTUNITY 4 INITIAL INVESTMENT 5 ANNUAL RETURN 6 SALVAGE VALUE 7 PRESENT WORTH 8 INTERNAL RATE OF RETURN 9 VALUE OF X 10 PORTFOLIO INVESTMENT 11 PORTFOLIO PRESENT WORTH MARR 12 13 INVESTMENT PERIOD 1 2 3 4 5 $20,000.00 $40,000.00 $30,000.00 $50,000.00 $75,000.00 $60,000.00 $2,600.00 $5,025.00 $3,750.00 $6,775.00 $9,350.00 $7,850.00 $20,000.00 $40,000.00 $30,000.00 $50,000.00 $75,000.00 $60,000.00 $1,130.04 $1,271.30 $847.53 $4,378.92 $1,977.58 $3,672.64 13.00% 12.56% 12.50% 1 1 1 13.55% 1 12.47% 13.08% 1 1 $20,000.00 $40,000.00 $30,000.00 $50,000.00 $75,000.00 $60,000.00 $275,000.00 $1,130.04 $1,271.30 $847.53 $4,378.92 $1,977.58 $3,672.64 $13,278.02 CAP CONSTRAINT $175,000.00 12% 10 14 Solver Parameters 15 16 Set Target Cel: 17 Equal To: Max MO Value of: By Changing Cels: 18. 19 20 Subject to the Constraints: 21 22 23 24 25 26 Solve Close Quess Options Add Change Beset Al Delete Help