Question
A company is deciding on at least three of five similar processes that should be implemented. The net present value (NPV) and capital required in
A company is deciding on at least three of five similar processes that should be implemented. The net present value (NPV) and capital required in thousands of dollars for each process are shown in the table below. The company has $2 million available for the required capital to implement the processes. If Pi represents the decision variable of selecting (value of 1) or not selecting (value of 0) process i (e.g., P2 is the decision variable of selecting or not selecting process 2), which of the following represents the model in MS Excel to be used with Solver?
Process NPV 1 $700.00 2 $500.00 3 $750.00 4 $600.00 5 $850.00 Required capital $600.00 $450.00 $650.00 $550.00 $725.00
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