Question: Please answer the following problem in a spreadsheet. Part A includes algebraic model and solver part. Problem 1 Part A . (10 points) The board
Please answer the following problem in a spreadsheet. Part A includes algebraic model and solver part.
Problem 1 Part A. (10 points) The board of directors of General Wheels Co. is considering seven large capital investment projects. Each investment can be made only once. These estimates differ in the estimated long-run profit (net present value) that they will generate as well as in the amount of capital required, as shown by the following table:
| Investment Project | Estimated Profit (millions) | Capital Required (millions) |
| 1 | $17 | $43 |
| 2 | $10 | $28 |
| 3 | $14 | $34 |
| 4 | $20 | $48 |
| 5 | $7 | $17 |
| 6 | $13 | $32 |
| 7 | $9 | $23 |
The total amount of capital available for these investments is $105 million. Investment project 1 and 3 are mutually exclusive, and project 5 cannot be taken unless project 3 is taken. The objective is to select the combination of capital investment projects that will maximize the total estimated long-run profit (net present value). Write down the algebra formulas and use Solver to solve the problems.
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
