Question: Question 2: Kappa & Associates is a medium sized construction management firm. Jacob White the vice president for planning at Kapa, is considering five projects

Question 2: Kappa & Associates is a medium sized

Question 2: Kappa & Associates is a medium sized construction management firm. Jacob White the vice president for planning at Kapa, is considering five projects for investment in the upcoming fiscal year. The capital investment required for each project and anticipated earnings (net of the investment cost) for each project are shown below. Jacob has a budget of 45 million dollars to spend on projects this year, and he would like to choose those projects that will maximize return for the firm, given his budget constraint. Further issues that Jacob must consider are: a. Projects 3 and 4 are complimentary, so management has decided that if either is included in the portfolio, they will take on both of the projects. b. Due to a possible conflict of interest, the firm cannot invest in projects 1 and 5 at the same time. Project Cost 12 million 18 million 13 million 17 million 16 million Profit (Net) 20 million 75 million 37 million 67 million 54 million What projects should Jacob include in his portfolio? Explain

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