Question
The ABC company is contemplating a number of one-time potential investment opportunities. The following table provides a best estimate of both net revenue and the
The ABC company is contemplating a number of one-time potential investment opportunities. The following table provides a best estimate of both net revenue and the projected capital outlay necessary.
Alternative | Projected Net Revenue | Projected Capital Outlay |
1 | 12 | 28 |
2 | 7 | 18 |
3 | 10 | 22 |
4 | 13 | 32 |
5 | 4 | 11 |
6 | 9 | 21 |
7 | 6 | 16 |
All figures are in tens of millions of dollars. The total amount of capital ABC has for investment is 80. Alternatives 1 and 2 are mutually exclusive as are 5 and 6. Additionally neither 5 nor 6 can be undertaken unless one of the first two alternatives is undertaken. The objective is to select the alternatives that will maximize the net revenue. All alternatives are binary.
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