Question: A real estate developer is considering four possible projects: a small apartment complex, a large apartment complex, a shopping center, and a warehouse. Each of

A real estate developer is considering four possible projects: a small apartment complex, a large apartment complex, a shopping center, and a warehouse. Each of these requires different funding over the next 2 years, and the net present values of the investments also vary. The following table provides the required investment amounts (in $1,000s) and the net present value (NPV) of each (also expressed in $1,000s):

Parameter Small Apartment Large Apartment Warehouse

Warehouse

NPV 13 24 23 16
Requirement Year 1 17 22 37 40

Requirement Year 2

20 34 30 32

The company has $120,000 to invest in year 1 and $90,000 to invest in year 2. The developer wants to determine which of these projects to implement while meeting the requirements and maximize the net present value of the undertaken projects.

(a) Define your decision variables. (b) Write a mathematical model that can be used to solve this problem (must provide the objective function and constraints mathematically). Be sure to write what each constraint represents

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