Question: Consider the following capital allocation problem having the net cash-flow estimates and PW values shown in the following table. MARR is 12% per year, and

 Consider the following capital allocation problem having the net cash-flow estimates

Consider the following capital allocation problem having the net cash-flow estimates and PW values shown in the following table. MARR is 12% per year, and the ceiling on investment funds available is $1,200,000. A1, A2 and A3 are mutually exclusive. B1 is an independent project. B2 depends on B1. C1, C2 and C3 are mutually exclusive and dependent on acceptance of A1 or A2. Formulate as LP model End of year A1 A2 A3 B1 0 $225,000 $290,000 $370,000 - $600,000 1 40,000 56,000 25,000 60,000 2 23,000 10,000 50,000 10,000 3 60,000 35,000 85,000 69,000 PW(000) $135.3 $146.0 $119.3 $164.1 Consider the following capital allocation problem having the net cash-flow estimates and PW values shown in the following table. MARR is 12% per year, and the ceiling on investment funds available is $1,200,000. A1, A2 and A3 are mutually exclusive. B1 is an independent project. B2 depends on B1. C1, C2 and C3 are mutually exclusive and dependent on acceptance of A1 or A2. Formulate as LP model End of year A1 A2 A3 B1 0 $225,000 $290,000 $370,000 - $600,000 1 40,000 56,000 25,000 60,000 2 23,000 10,000 50,000 10,000 3 60,000 35,000 85,000 69,000 PW(000) $135.3 $146.0 $119.3 $164.1

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