Question: A company is considering 5 projects. Each approved project will be completed over a 3-year period. Annual expenses and the final return for each project

A company is considering 5 projects. Each approved project will be completed over a 3-year period. Annual expenses and the final return for each project is shown below (in thousand dollars):

	Expenses
Project	Year 1	Year 2	Year 3	Yields
1	5	1	8	20
2	4	7	10	40
3	3	9	2	20
4	7	4	1	15
5	8	6	10	30

The company must choose the projects with the aim of maximizing total yields. In addition, the following information is available:

Projects 3 and 5 cannot be approved together.

If neither Project 4 or 5 is selected, Projects 1 and 2 must be selected.

The companys available annual capital is $25000, but it must reduce its expenditure by $5000 in one of the 3 years (i.e., can spend up to $20000 in that year) and that particular year must be also selected to maximize profits.

What projects must be selected and in which year $5000 must be saved?

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