Integer programming p6-40, p6-44
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Capital budgeting | |||||||||||||||
Note: All cash amounts are in $millions. | |||||||||||||||
Cash outflows in various years, NPV of projects | |||||||||||||||
Project 1 | Project 2 | Project 3 | Project 4 | Project 5 | Project 6 | Project 7 | Project 8 | Project 9 | Project 10 | Project 11 | Project 12 | ||||
Year 1 | $1 | $3 | $4 | $6 | $5 | $4 | $2 | $0 | $1 | $3 | $9 | $8 | |||
Year 2 | $3 | $4 | $4 | $5 | $1 | $5 | $3 | $0 | $1 | $2 | $2 | $7 | |||
Year 3 | $4 | $2 | $3 | $3 | $2 | $2 | $1 | $3 | $4 | $4 | $4 | $1 | |||
Year 4 | $1 | $1 | $2 | $2 | $3 | $5 | $4 | $6 | $8 | $1 | $1 | $1 | |||
Year 5 | $1 | $2 | $1 | $3 | $8 | $5 | $6 | $7 | $3 | $6 | $1 | $1 | |||
NPV | $20 | $25 | $30 | $35 | $40 | $42 | $31 | $33 | $35 | $37 | $38 | $39 | |||
Selected projects (1 if selected, 0 if not) | |||||||||||||||
Project 1 | Project 2 | Project 3 | Project 4 | Project 5 | Project 6 | Project 7 | Project 8 | Project 9 | Project 10 | Project 11 | Project 12 | ||||
Budget constraints | |||||||||||||||
Outflow | Budget | ||||||||||||||
Year 1 | |||||||||||||||
Year 2 | |||||||||||||||
Year 3 | |||||||||||||||
Year 4 | |||||||||||||||
Year 5 | |||||||||||||||
Total NPV | |||||||||||||||
QUESTION: You are given a group of possible investment projects for your company's capital. For each project, ou are given the NPV the project would add to the firm, | |||||||||||||||
as well as the cash outflow required by each project during each year. Given the information above, determine the ivnestments that maximize the firm's NPV. The firm | |||||||||||||||
has $30 million available during each of the next five years. All numbers are in millions of dollars. |
- 9 years ago
Integer programming p6-40, p6-44
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