Question: Make up an example as described in Problem 54 with

Make up an example, as described in Problem 54, with 20 possible investments. However, do it so that the ratios of NPV to cash requirement are in a very tight range, from 3.0 to 3.2. Then use Solver to find the optimal solution when the Solver tolerance is set to its default value of 5%, and record the solution. Next, solve again with the tolerance set to zero. Do you get the same solution? Try this on a few more instances of the model, where you keep tinkering with the inputs. The question is whether the tolerance matters in these types of narrow-range problems.

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  • CreatedApril 01, 2015
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