28. Rex Electric has decided to move into low-rise (2–8 fl oors) commercial building electrical wiring. After great success in upscale residential and small commercial wiring, they have identifi ed four independent and divisible investments, any or all of which will help make the move to the next level. Rex Electric’s MARR is 10%, and $500,000 is available for investment immediately, with $175,000 available for follow-up investment the next year. The cash fl ows, in thousands of dollars, are shown below.

a. Determine the optimum portfolio, including which investments are fully or partially (if partial, give percentage) selected. You may use Excel®;
do not use SOLVER.

b. Determine the optimum portfolio and its PW, specifying which investments are fully or partially (give percentage) selected using (1) the current limit on investment capital at the end of year 0, (2) plus 20%, and (3)
minus 20%. Use Excel® and SOLVER.

c. Determine the optimum portfolio and its PW, specifying which investments are fully or partially (give percentage) selected using (1) the current MARR, (2) plus 20%, and (3) minus 20%. Use Excel® and SOLVER.

d. Determine the optimum investment portfolio and its PW when investments 2 and 4 are indivisible, investments 1 and 3 are divisible, and only $125,000 in investment capital will be available for follow-up investment at the end of year 1. Use Excel® and SOLVER.

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CF(1) CF(2) CF(3) CF(4) 0 -$50 -$125 -$200 -$250 1 -$100 -$75 $50 $75 234569 $50 $70 $50 $75 $50 $70 $50 $75 $50 $70 $50 $75 $50 $70 $75 $75 $50 $70 $75 $85 $50 $70 $75 $85 8 $50 $70 $75 $85 9 $50 $70 $75 $85 10 $75 $100 $75 $100