Question
Spencer Enterprises is attempting to choose among a series of new investment alternatives. The potential investment alternatives, the net present value of the future stream
Spencer Enterprises is attempting to choose among a series of new investment alternatives. The potential investment alternatives, the net present value of the future stream of returns, the capital requirements, and the available capital funds over the next three years are summarized as follows. Capital Requirements ($) Alternative Number Alternative Net Present Value ($) Year 1 Year 2 Year 3 1 Limited warehouse expansion 3,500 3,000 1,000 4,000 2 Extensive warehouse expansion 6,500 2,500 3,500 3,500 3 Test market new product 11,000 6,000 4,000 5,000 4 Advertising campaign 4,500 2,000 1,500 1,800 5 Basic research 7,500 5,000 1,000 4,000 6 Purchase new equipment 2,500 1,000 500 900 Capital funds available 10,500 7,000 8,750 (a) Develop an integer programming
According to this model, what is the maximum net present value (in $ )? $ Assume that only one of the warehouse expansion projects can be impleme In addition to the constraints from part (a), what additional constraint shou According to this model, what is the maximum net present value (in \$)? $ c) Suppose that if test marketing of the new product is carried out, the adverti In addition to the constraints from part (a) and part (b), what additional cor According to this model, what is the maximum net present value (in \$)? $Step by Step Solution
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