PART 1

Given the following constraints how do I maximize the total NPV for the following Projects given the following constraints:

1) Capital expenditures over 3 years should not exceed $10 billion

2) Capital expenditures in any single year should not exceed $4 billion

3) At least one project must be approved for each functional area

Bluejay Natural Gas Financials (in millions)

Given:

Given:

Project Index

Functional Area

Partnership %

Capex Year 1

Capex Year 2

Capex Year 3

NPV

1

FA 1

100%

$ 250

$ 100

$ 100

60

2

FA 1

33%

$ 500

$ 300

$ 300

180

3

FA 1

50%

$ 100

$ 200

$ 400

80

4

FA 1

100%

$ 750

$ 500

$ 300

310

5

FA 1

75%

$ 200

$ 400

$ 800

220

6

FA 2

50%

$ 1,000

$ 300

$ 300

180

7

FA 2

100%

$ 750

$ 750

$ 300

410

8

FA 2

100%

$ 800

$ 700

$ 600

280

9

FA 2

67%

$ 400

$ 600

$ 800

380

10

FA 3

100%

$ 100

$ 200

$ 400

100

11

FA 3

50%

$ 700

$ 500

$ 300

260

12

FA 3

100%

$ 1,500

$ 400

$ 400

340

Adjusted based on % Partnership:

Project Index

Functional Area

Partnership %

Cap Ex. Yr1

Cap Ex. Yr2

Cap Ex. Yr3

Total Cost

NPV

New NPV

ROI

Approval Rating

1

FA 1

100%

$ 250

$ 100

$ 100

$ 450

$ 60

$ 53

0

2

FA 1

33%

$ 165

$ 99

$ 99

$ 363

$ 180

$ 158

14%

1

3

FA 1

50%

$ 50

$ 100

$ 200

$ 350

$ 80

$ 70

10%

1

4

FA 1

100%

$ 750

$ 500

$ 300

$ 1,550

$ 310

$ 273

18%

1

5

FA 1

75%

$ 150

$ 300

$ 600

$ 1,050

$ 220

$ 194

14%

1

FA 1 Approved Totals:

$ 1,115

$ 999

$ 1,199

$ 3,313

6

FA 2

50%

$ 500

$ 150

$ 150

$ 800

$ 180

$ 158

10%

1

7

FA 2

100%

$ 750

$ 750

$ 300

$ 1,800

$ 410

$ 361

20%

1

8

FA 2

100%

$ 800

$ 700

$ 600

$ 2,100

$ 280

$ 246

0

9

FA 2

67%

$ 268

$ 402

$ 536

$ 1,206

$ 380

$ 334

19%

1

FA 2 Approved Totals:

$ 1,518

$ 1,302

$ 986

$ 3,806

10

FA 3

100%

$ 100

$ 200

$ 400

$ 700

$ 100

$ 88

0

11

FA 3

50%

$ 350

$ 250

$ 150

$ 750

$ 260

$ 229

15%

1

12

FA 3

100%

$ 1,500

$ 400

$ 400

$ 2,300

$ 340

$ 299

13%

1

FA 3 Approved Totals:

$ 1,850

$ 650

$ 550

$ 3,050

Cap Ex. Yr1

Cap Ex. Yr2

Cap Ex. Yr3

Total Cost

Total Approved NPV:

Overall Totals for Approved Projects:

$ 4,483

$ 2,951

$ 2,735

$ 10,169

$ 2,077

ROI

% Change

Average

Minimum

Maximum

15%

10%

20%

0%

17%

11%

23%

5%

16%

11%

22%

10%

15%

10%

21%

15%

14%

10%

19%

20%

13%

9%

18%

25%

13%

8%

17%

30%

12%

8%

16%