Question: 1. Formulate the spread model for the probelm below. 2. Display the model in excel. A real estate development firm, Peterson and Johnson, is considering

1. Formulate the spread model for the probelm below.

2. Display the model in excel.

A real estate development firm, Peterson and Johnson, is considering five possible development projects. The following table shows the estimated long-run profit (net present value) that each project would generate, as well as the amount of investment required to undertake the project, in units of millions of dollars. Development Project 1 2 3 3 4 5 Estimated profit Capital required 1 6 1.8 12 1.6 10 0.8 4 1.4 8 The owners of the firm, Dave Peterson and Ron Johnson, have raised $20 million of investment capital for these projects. Dave and Ron now want to select the combination of projects that will maximize their total estimated long-run profit (net present value) without investing more that $20 million

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