8.10 As engineer for a company developing high efficiency solar panels you have an annual research and development budget of $500,000. Each year you call for submissions from within the company for projects that could be done. As part of this the proponents must estimate the cost of the proposal and what benefits would come from a successful outcome. This year you have eight proposals to consider, and one criterion for funding is economic benefits. The details of the proposals are given in Table 8.9. Any calculations that you do should assume a project life of 5 years and a discount rate of 20% p.a. (a) Use the B/C ratio to determine which projects you would select. In this case the best proposals are chosen from a ranked list. (b) Use NPV to determine which projects you would select. In this case the problem can be considered as one that could be solved using linear programming, but you may attempt to find a solution by inspection. As an additional exercise it would be good to set the problem up in EXCEL and use Solver to verify the solution obtained by hand. ABCDEFGH 100,000 200,000 Table 8.9 Summary of economic factors associated with the eight research proposals to be assessed. Project Initial Cost($) Annual Benefit($) 55,000 100,000 50,000 24,000 10,000 8,000 20,000 20,000 345,000 120,000 100,000 34,000 250,000 160,000