Your employer is trying to select from a list of possible capital projects. The projects, along with their cost and benefits, are listed below. The capital budget available is $1 million. In addition to spending constraints, your employer would like to select at least 2 projects. Projects 1 and 5 cannot both be selected together. Formulate the problem as a linear program and determine the optimal solution. Project Cost Net Present Value $205,000 $285,000 $280,000 $260,000 $235,000 $600,000 $620,000 2. $540,000 $790,000 $400,000 4. 5 Which projects should be selected? Project 1 will Project 2 will Project 3 will Project 4 will Project 5 will

Your employer is trying to select from a list of possible capital projects. The projects, along with their cost and benefits, are listed below. The capital budget available is $1 million. In addition to spending constraints, your employer would like to select at least 2 projects. Projects 1 and 5 cannot both be selected together. Formulate the problem as a linear program and determine the optimal solution. Project Cost Net Present Value $205,000 $285,000 $280,000 $260,000 $235,000 $600,000 $620,000 2. $540,000 $790,000 $400,000 4. 5 Which projects should be selected? Project 1 will Project 2 will Project 3 will Project 4 will Project 5 will

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter10: The Basics Of Capital Budgeting: Evaluating Cash Flows

Section: Chapter Questions

Problem 23SP: Start with the partial model in the file Ch10 P23 Build a Model.xlsx on the textbooks Web site....

See similar textbooks

Similar questions

You have made the followed calculation for your client. You must make a decision concerning the project they can take with a budget of 190 Million €. You know the pros and cons of each rule, and you try to make the best decision by comparing the results. Comment the table and explain your decisions Required PV NPV IRR PI Investment Project 1 Project 2 Project 3 Project 4 Project 5 -110.00 0.15 209.44 4.16 0.17 0.038 - 80.00 0.06 153.68 39.77 0.30 0.497 - 70.00 0.10 151.30 27.90 0.30 0.399 - 90.00 0.08 156.92 19.70 0.18 0.219 - 50.00 0.25 252.59 25.04 0.51 0.501
Your employer is trying to select from a list of possible capital projects. The projects, along with their cost and benefits, are listed below. The capital budget available is $1 million. In addition to spending constraints, your employer would like to select at least 2 projects. Projects 4 and 5 cannot both be selected together. Formulate the problem as a linear program and determine the optimal solution. Project 1 Cost Net Present Value $260,000 $210,000 $720,000 $590,000 $570,000 $470,000 $490,000 3 $235,000 $215,000 4. $220,000 Which projects should be selected? Project 1 will Project 2 will Project 3 will Project 4 will Project 5 will
Your employer is trying to select from a list of possible capital projects. The projects, along with their cost and benefits, are listed below. The capital budget available is $1 million. In addition to spending constraints, your employer would like to select at least 2 projects. Projects 4 and 5 cannot both be selected together. Formulate the problem as a linear program and determine the optimal solution. Project Cost Net Present Value $260,000 $210,000 $720,000 $590,000 2 $570,000 $470,000 $235,000 $215,000 $220,000 $490,000 Which projects should be selected? Project 1 will Project 2 will Project 3 will Project 4 will Project 5 will What is the total net present value of these projects? Total net present value
31 Note: This problem requires the use of a linear programming application such as Solver or Analytic Solver. Your employer is trying to select from a list of possible capital projects. The projects, along with their cost and benefits, are listed below. The capital budget available is $1 million. In addition to spending constraints, your employer would like to select at least two projects. If project 1 is chosen then project 2 cannot be selected. Formulate the problem as a linear program and determine the optimal solution. Project 1 2 345 Cost $250,000 $500,000 $290,000 $650,000 $750,000 Multiple Choice Net Present Value $500,000 $750,000 $333,000 $400,000 $600,000 O Project 1 and project 2
Consider the following information about a project: PROJECT YEAR O YEAR 1 YEAR 2 YEAR 3 YEAR 4 COSTS $160,000 $43,000 $50,000 $50,000 $64,000 BENEFITS $0 $400,000 $400, 000 $500,000 $500,000 a) Calculate the NPV assuming 10% discount rate b) Determine in which year will be the payback c) Calculate (ROI)? Provide the detail answer for your calculation.
You are considering the following two projects for investment: Project A Project B Year 0 ($10000) ($5000) Year 1 $3000 $3000 Year 2 $7000 $4000 Year 3 $9000 $5000 You must conduct an analysis using your knowledge of capital budgeting (NPV, IRR ect, ) and time value of money to decide which of the options is better. All analysis must be done in Excel. (This will require all calculations to be done using cell references and excel functions). Your analysis will require you to: A. Calculate thefollowing values for the investment proposals: i. The payback period assuming end-of-the-year cash flows. ii. The discounted payback period assuming a required rate of return of 10% and ending of-the-year cash flows. iii. The NPV of each project. iv. The PI of each…
You are evaluating the following two mutually exclusive projects: Project Year 0 Year 1 Year 2 A -$100 $95 $140 B -$50 $50 $120 Both have 15% cost of capital. Using NPV profiles for Projects A and B, determine which project would be chosen under each of IRR rule and NPV rule. (Hint: Draw the NPV profiles.) Group of answer choices A under IRR rule, and B under NPV rule B under IRR rule, and A under NPV rule A under both IRR and NPV rules Cannot be determined. B under both IRR and NPV rules
Determine the best alternatives for a government project with the following data: PROJECT A B C ANNUAL BENEFIT P250,000.00 P320,000.00 P350,000.00 ANNUAL COSTS P100,000.00 P135,000.00 p180,000.00 B/C RATIO 2.5 2.37 1.94 What is the best Project and its incremental ratio? a. A = 1.2 b. A = 2 c. B = 2.0 d. B = 1.18
Calculate the profitability index for the below projects and indicate your order of choices. Project Present Value Investment A $145,000 $95,000 $135,000 $80,000 $175,000 $110,000 Select one: a. B, A and C b. A, C and B c. B, C and A d. C, B and A B с
Suppose that you could invest in the following projects but have only $29,700 to invest. How would you make your decision and in which projects would you invest? Project Cost A $7,850 B C D 11,060 9,200 6,540 NPV $3,200 6,460 4,150 3,090 You should invest in project(s)
Suppose that you could invest in the following projects but have only $24,480 to invest. Which projects would you choose? Project Cost NPV w $ 7,970 $ 3,000 x 10,990 7,530 y 8,500 4,280 z 6,750 3,890 You should invest in project(s)?
Suppose that you could invest in the following projects but have only $29,670 to invest. How would you make your decision and in which projects would you invest? Project Cost NPV A $8,260 $4,300 BCD 10,850 6,470 9,070 4,830 7,170 3,940 You should invest in project(s) E