Question
Q: Eaton Medical Services is evaluating 10 independent indivisible projects, all with positive NPV. The company's capital budgeting for the year is limited to a
Q: Eaton Medical Services is evaluating 10 independent indivisible projects, all with positive NPV. The company's capital budgeting for the year is limited to a maximum of $5,000,000.
(a) Use solver to find the optimum combination of projects the company should accept, under the assumption that A and B are mutually exclusive and one of them has to be selected.
(b)Ignore the constraint from previous part, assume that project I has to be accepted. Use solver to find optimum combination of projects the company should accept now.
Run solver with Simplex and GRG nonlinear, and accept the best answer
Project | Cost | NPV |
A | 1,061,191 | 122,737 |
B | 561,758 | 58,102 |
C | 1,647,849 | 280,660 |
D | 1,026,020 | 89,365 |
E | 191,870 | 17,568 |
F | 1,333,625 | 76,960 |
G | 3,102,642 | 123,240 |
H | 275,568 | 79,367 |
I | 2,044,070 | 60,506 |
J | 1,017,567 | 56,690 |
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