Question
Nadia is trying to select from a list of possible capital projects. The projects, along with their cost and benefits, are listed below. Nadia's available
Nadia is trying to select from a list of possible capital projects. The projects, along with their cost and benefits, are listed below. Nadia's available budget is $1 million. In addition to spending constraints, Nadia would like to select at least 2 projects. Projects 2 and 4 cannot both be selected together. Formulate the problem as a linear program and determine the optimal solution.
| Project | Cost | Net Present Value |
|---|---|---|
| 1 | $285,000 | $780,000 |
| 2 | $275,000 | $770,000 |
| 3 | $240,000 | $400,000 |
| 4 | $275,000 | $570,000 |
| 5 | $255,000 | $730,000 |
Which projects should Nadia select?
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Introduction to Management Science
Authors: Bernard W. Taylor
11th Edition
132751917, 978-0132751919
