2 A company is considering three alternative investments from which tochoose. It will cost $21,000 to consider investment 1, and $30,000 toconsider investment 2, and $28,000 to consider investment 3. Thecompany can only choose 2 out of the 3 investments and it has a budgetof $62,000 to spend on these investments. The company has a limitationof 36 resources for these investments, where investment 1 requires 15resources, investment 2 requires 13 resources and investment 3 requires18. The NVP on investment 1 is $9000, $12000 for investment 2, and$8000 for investment 3.Develop a 0-1 integer programming model to maximize the NPV in thissituation. Use excel to solve this problem.The Objective function: [Select] #The Constraint:Budget: [Select]Resources: [Select] 3Budget: Select]Resources: [Select] +Investments: [Select]The Optimal solution:X1= [Select][Select]Profit= $[Select]++<>X2= [Select]<>+X3=Which of the three investments would be undertaken if NPV ismaximized? [Select]

Decision Variable: Suppose-X1, X2, and X3 be the decision variables. It can be 0 or 1. 0 indicates…

Answered: A company is considering three…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter9: Decision Making Under Uncertainty

Section: Chapter Questions

Problem 34P

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