Question

SHOW ALL WORK! Consider a capital budgeting example with five projects from which to select. Let...

SHOW ALL WORK!

Consider a capital budgeting example with five projects from which to select. Let xi = 1 if project i is selected, 0 if not, for i = 1,...,5. Write the appropriate constraint(s) for each condition. Conditions are independent.

a. Choose no fewer than four projects.
b. If project 2 is chosen, project 3 must be chosen.
c. If project 5 is chosen, project 4 must not be chosen.
d. Projects cost 130, 220, 150, 75, and 300 respectively. The budget is 475.
e. No more than two of projects 3, 4, and 5 can be chosen.

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Consider a capital budgeting problem with seven projects represented by binary (0 or 1) variables X1,...
Consider a capital budgeting problem with seven projects represented by binary (0 or 1) variables X1, X2, X3, X4, X5, X6, X7. Write a constraint modeling the situation in which only 2 of the projects from 1, 2, 3, and 4 must be selected. Write a constraint modeling the situation in which at least 2 of the project from 1, 3, 4, and 7 must be selected. Write a constraint modeling the situation project 3 or 6 must be selected,...
Capital budgeting criteria: mutually exclusive projects A firm with a WACC of 10% is considering the...
Capital budgeting criteria: mutually exclusive projects A firm with a WACC of 10% is considering the following mutually exclusive projects: 0 1 2 3 4 5 Project A -$500 $45 $45 $45 $220 $220 Project B -$600 $300 $300 $50 $50 $50 Which project would you recommend? Select the correct answer. I. Neither A or B, since each project's NPV < 0. II. Both Projects A and B, since both projects have NPV's > 0. III. Both Projects A and...
Brooks Development Corporation (BDC) faces the following capital budgeting decision. Six real estate projects are available...
Brooks Development Corporation (BDC) faces the following capital budgeting decision. Six real estate projects are available for investment. The net present value and expenditures required for each project (in millions of dollars) are as follows: Project    1    2    3    4 5    6 Net Present value ($Millions) $15 $5    $13 $14    $20    $9 Expedature required ($Millions) $90 $34    $81 $70    $114    $50 There are conditions that limit the investment alternatives:...
Capital budgeting criteria: mutually exclusive projects A firm with a WACC of 10% is considering the...
Capital budgeting criteria: mutually exclusive projects A firm with a WACC of 10% is considering the following mutually exclusive projects: 0 1 2 3 4 5 Project 1 -$400 $65 $65 $65 $210 $210 Project 2 -$400 $300 $300 $55 $55 $55 Which project would you recommend? Select the correct answer. I. Both Projects 1 and 2, since both projects have NPV's > 0. II. Project 2, since the NPV2 > NPV1. III. Neither A or B, since each project's...
CAPITAL BUDGETING CRITERIA A firm with a 14% WACC is evaluating two projects for this year's...
CAPITAL BUDGETING CRITERIA A firm with a 14% WACC is evaluating two projects for this year's capital budget. After-tax cash flows, including depreciation, are as follows: 0 1 2 3 4 5 Project M -$18,000 $6,000 $6,000 $6,000 $6,000 $6,000 Project N -$54,000 $16,800 $16,800 $16,800 $16,800 $16,800 Calculate NPV for each project. Round your answers to the nearest cent. Do not round your intermediate calculations. Project M    $ Project N    $ Calculate IRR for each project. Round your answers to two...
CAPITAL BUDGETING CRITERIA A firm with a 13% WACC is evaluating two projects for this year's...
CAPITAL BUDGETING CRITERIA A firm with a 13% WACC is evaluating two projects for this year's capital budget. After-tax cash flows, including depreciation, are as follows: 0 1 2 3 4 5 Project M -$27,000 $9,000 $9,000 $9,000 $9,000 $9,000 Project N -$81,000 $25,200 $25,200 $25,200 $25,200 $25,200 Calculate NPV for each project. Round your answers to the nearest cent. Do not round your intermediate calculations. Project M    $ Project N    $ Calculate IRR for each project. Round your answers to two...
Quantitative Problem: Bellinger Industries is considering two projects for inclusion in its capital budget, and you...
Quantitative Problem: Bellinger Industries is considering two projects for inclusion in its capital budget, and you have been asked to do the analysis. Both projects' after-tax cash flows are shown on the time line below. Depreciation, salvage values, net operating working capital requirements, and tax effects are all included in these cash flows. Both projects have 4-year lives, and they have risk characteristics similar to the firm's average project. Bellinger's WACC is 11%. 0 1 2 3 4 Project A...
The essence of capital budgeting and resource allocation is a search for good investments in which...
The essence of capital budgeting and resource allocation is a search for good investments in which to place the firm’s capital. The process can be simple when viewed in purely mechanical terms, but a number of subtle issues can obscure the best investment choices. The capital-budgeting analyst, therefore, is necessarily a detective who must winnow bad evidence from good. Much of the challenge is in knowing what quantitative analysis to generate in the first place. Suppose you are a new...
Answer Questions 2 and 3 based on the following LP problem. Let     P1 = number of...
Answer Questions 2 and 3 based on the following LP problem. Let     P1 = number of Product 1 to be produced           P2 = number of Product 2 to be produced           P3 = number of Product 3 to be produced Maximize 100P1 + 120P2 + 90P3         Total profit Subject to         8P1 + 12P2 + 10P3 ≤ 7280       Production budget constraint             4P1 + 3P2 + 2P3 ≤ 1920       Labor hours constraint                                    P1 > 200         Minimum quantity needed...
Which of the following distinguishes scenario analysis from sensitivity analysis? a. Scenario analysis only applies to...
Which of the following distinguishes scenario analysis from sensitivity analysis? a. Scenario analysis only applies to new product development projects. b. Sensitivity analysis only applies to new product development projects c. Sensitivity analysis involves changing one project variable at a time while scenario analysis involves changing more than one project variable at the same time d. Sensitivity analysis only applies when projects are mutually exclusive. 3. Which of the following statements is true regarding the internal rate of return (IRR)?...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT