Aerotron Radio Inc. has \(\$ 250,000\) available, and its engineering staff has proposed the following indivisible investments. With each, Aerotron can exit at the end of its planning horizon of 5 years and have its initial investment returned. In addition, each year Aerotron will receive the annual return shown below. MARR is 12 percent.

For the original problem:

a. Which investments should Aerotron select for the optimum portfolio?

b. What is the present worth for the optimum investment portfolio?

c. What is the IRR for the optimum investment portfolio?
In addition to the original problem statement, let Investments 1 and 4 be mutually exclusive and Investment 3 be contingent on Investment 2:

d. Now, which alternatives should Aerotron select?

e. What is the present worth for the optimum investment portfolio?

f. What is the IRR for the optimum investment portfolio?
Consider the original problem using SOLVER for sensitivity analysis:
g. Determine the optimum portfolio (state the investments selected and the portfolio PW) using (1) the current limit on investment capital, (2) plus 20 percent, and (3) minus 20 percent.
h. Determine the optimum portfolio (state the investments selected and the portfolio PW) using (1) the current MARR, (2) plus 20 percent, and (3) minus 20 percent.

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Investment 1 2 3 5 Initial Investment $75,000 $65,000 $50,000 $80,000 $100,000 Annual Return $10,800 $12,000 $7,500 $13,750 $15,750