The company "H" considers four investment alternatives over the next four years. The company's budget for each year as follows: 45 million won in the first year, 50 million won in the second year, 43 million won in the third year, and 37 million won in the fourth year. Due to budget constraints, the company wants to choose the combination of projects that is expected to get the maximum benefit. The estimated NPV and capital expenditure for each project are presented as follows. Project Factory expansion Warehouse expansion Machine replacement New product R&D Capital expenditure (unit - milion won) NPV (net present value) (estimated, unit - milion won) 1st year 2nd year 3rd year 4th year 95 15 25 20 15 37 10 15 20 7 12 11 0 0 4 35 17 10 10 9 (1) Formulate an IP model for the optimal project selection so as to maximize NPV. (2) Make a spreadsheet model corresponding to your IP model in (1) and solve it using Excel Solver. KAVIATION UNIVERSITY Assign 7 - #6. Investment (2/2) (3) If the factory is not expanded, the warehouse cannot be expanded. What constraints should be added to your IP model? (4) If the factory is expanded, the warehouse must be expanded. What constraints should be added to your IP model? (5) If factory expansion and machine replacement are not carried out at the same time, new product R&D cannot be conducted. What constraints should be added to your IP model? The company "H" considers four investment alternatives over the next four years. The company's budget for each year as follows: 45 million won in the first year, 50 million won in the second year, 43 million won in the third year, and 37 million won in the fourth year. Due to budget constraints, the company wants to choose the combination of projects that is expected to get the maximum benefit. The estimated NPV and capital expenditure for each project are presented as follows. Project Factory expansion Warehouse expansion Machine replacement New product R&D Capital expenditure (unit - milion won) NPV (net present value) (estimated, unit - milion won) 1st year 2nd year 3rd year 4th year 95 15 25 20 15 37 10 15 20 7 12 11 0 0 4 35 17 10 10 9 (1) Formulate an IP model for the optimal project selection so as to maximize NPV. (2) Make a spreadsheet model corresponding to your IP model in (1) and solve it using Excel Solver. KAVIATION UNIVERSITY Assign 7 - #6. Investment (2/2) (3) If the factory is not expanded, the warehouse cannot be expanded. What constraints should be added to your IP model? (4) If the factory is expanded, the warehouse must be expanded. What constraints should be added to your IP model? (5) If factory expansion and machine replacement are not carried out at the same time, new product R&D cannot be conducted. What constraints should be added to your IP model