Nikul New Exercise Bank Content Qu. 10-14Yakima Construction Corporation (YCC) is considering a number of different development projects. The cash outflows that would berequired to complete each project are indicated in the table below, along with the expected net present value of each project (allvalues in millions of dollars).Project 1 Project 2 Project 3Project 4 Project 5923NPV ($million)121520Cumulative Cash Outflow Required ($million)Year 181012414Year 2141818720Year 3172524925Year 4173030932Click here for the Excel Data FileEach project must be done in full (with the corresponding cash flows for all four years) or not done at all. Furthermore, there are thefollowing additional considerations. Project 1 cannot be done unless Project 2 is also undertaken, and projects 3 and 4 would competewith each other, so they should not both be chosen. YCC expects to have the following cash available to invest in these projects: $30million for year 1, $25 million for year 2, $16 million for year 3, and $12 million for year 4. Any available money not spent in a given yearis then available to spend the following year. YCC's policy is to choose their projects so as to maximize their total expected NPV.Formulate and solve this model on a spreadsheet.a. Determine the combination of each project that YCC should undertake to maximize total expected NPV.Note: Leave no cells blank. Enter "O" wherever required.Project 1Project 2Project 3Project 4Project 5Undertake? (Enter 1 if "Yes", 0 if "No")

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Answered: Yakima Construction Corporation (YCC)…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter9: Decision Making Under Uncertainty

Section: Chapter Questions

Problem 30P

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