Stockco is considering four investments. Investment 1 will yield a net present value (NPV) of $16, 000, investment 2, an NPV of $22, 000; investment 3, an NPV of $12,000; and investment 4, an NPV of S8,000. Each investment requires a certain cash outflow at the present time: investment 1, 55,000, investment 2, $7, 000, investment 3, $4, 000, and investment 4, $3,000. Currently, $14,000 is available for investment. Formulate an IP whose solution will tell Stockco how to maximize the NPV obtained from investments 1-4
Stockco is considering four investments. Investment 1 will yield a net present value (NPV) of $16, 000, investment 2, an NPV of $22, 000; investment 3, an NPV of $12,000; and investment 4, an NPV of S8,000. Each investment requires a certain cash outflow at the present time: investment 1, 55,000, investment 2, $7, 000, investment 3, $4, 000, and investment 4, $3,000. Currently, $14,000 is available for investment. Formulate an IP whose solution will tell Stockco how to maximize the NPV obtained from investments 1-4
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter6: Optimization Models With Integer Variables
Section6.3: Capital Budgeting Models
Problem 3P: Solve Problem 1 with the extra assumption that the investments can be grouped naturally as follows:...
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