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The book isn't in your list. but here's the question: Perry Enterprises is considering a number of investment possibilities. Specifically, each investment under consideration will draw on the capital account during each of its first three years, but in the long run, each is predicted to achieve a positive net present value (NPV). Listed are the investment alternatives, their net present values, and their capital requirements, and all figures are in thousands of dollars. In addition, the amount of capital available to the investments in each of the next three years is predicted to be $9.5 million, $7.5 million, and $8.8 million, respectively. (It shows a chart that I attached in the images) For the model, I am unsure of how the constraints are supposed to be applied. Do I have to purchase the investment for all three years if I choose to invest in that investment or can I choose to only invest in it one or two years? If I invest in it more than one year, do I still only recieve the NPV one time?

The book isn't in your list. but here's the question: Perry Enterprises is considering a number of investment possibilities. Specifically, each investment under consideration will draw on the capital account during each of its first three years, but in the long run, each is predicted to achieve a positive net present value (NPV). Listed are the investment alternatives, their net present values, and their capital requirements, and all figures are in thousands of dollars. In addition, the amount of capital available to the investments in each of the next three years is predicted to be $9.5 million, $7.5 million, and $8.8 million, respectively. (It shows a chart that I attached in the images) For the model, I am unsure of how the constraints are supposed to be applied. Do I have to purchase the investment for all three years if I choose to invest in that investment or can I choose to only invest in it one or two years? If I invest in it more than one year, do I still only recieve the NPV one time?

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter9: Decision Making Under Uncertainty
Section9.4: The Precision Tree Add-in
Problem 9P
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The book isn't in your list. but here's the question:

Perry Enterprises is considering a number of investment possibilities. Specifically, each investment under consideration will draw on the capital account during each of its first three years, but in the long run, each is predicted to achieve a positive net present value (NPV). Listed are the investment alternatives, their net present values, and their capital requirements, and all figures are in thousands of dollars. In addition, the amount of capital available to the investments in each of the next three years is predicted to be $9.5 million, $7.5 million, and $8.8 million, respectively.

(It shows a chart that I attached in the images)

For the model, I am unsure of how the constraints are supposed to be applied. Do I have to purchase the investment for all three years if I choose to invest in that investment or can I choose to only invest in it one or two years? If I invest in it more than one year, do I still only recieve the NPV one time?

the model be implementable without any rounding off. 1mat 13, the solution must contain integer decisions. What are the optimel all demand is mel CAUL pr producis as Joration Tn par actional solution in part (a)? unucu-OT VCTSION 4. Investment Choice. Perry Enterprises is considering a number of investment possibilities, Špecifically, each invest- ment under consideration will draw on the capital account during each of its first three years, but in the long run, each is predicted to achieve a positive net present value (NPV). Listed here are the investment alternatives, their net pres- ent values, and their capital requirements, and all figures are in thousands of dollars. In addition, the amount of capital available to the investments in each of the next three years is predicted to be $9.5 million, $7.5 million, and $8.8 million, respectively. an f ws: Contribution Fixed Cost Demand oduct $1.20 290,000 S60,000 1.80 200,000 200,000 2.30 50,000 55,000 Project Basic Purchase Advertising Campaign One-Phase Two-Phase Test Expansion Expansion Market Research Equipment NPV 4,200 6,800 9,600 4,400 8,700 3,500 2,000 5,000 1,000 Year 1 Capital Year 2 Capital Year 3 Capital 3,000 2,500 6,000 1,000 3,500 4,000 1,500 1,000 500 4,000 3,500 5,000 1,800 4,000 900 Eac' 1on three machines. The stan a. Assuming that any combination of the investments is permitted, which ones should Perry make to maximize NPV? pr ctivities and capaciies b. What is the optimal NPV in the combination chosen in part (a)? c. Suppose that the expansion investments are mutually exclu- sive and only one of them can be made. How does this alter the solution in part (a)? d. Suppose that the test market cannot be carried out unless the advertising campaign is also adopted. How does this C contingency alter the solution in (a)? Hours per 1,000 Units Hours Ma e Product I Product J Product K Available A 3.205 3.846 7.692 1,900 B. 2.747 4.808 6.410 1,900 1.923 1,900 3.205 9.615 ing Stock. Poly Products sells packaging tape to indus- wiatns irom Ilmaster Ton, wnicn is 15 incnes wide, The
Transcribed Image Text:the model be implementable without any rounding off. 1mat 13, the solution must contain integer decisions. What are the optimel all demand is mel CAUL pr producis as Joration Tn par actional solution in part (a)? unucu-OT VCTSION 4. Investment Choice. Perry Enterprises is considering a number of investment possibilities, Špecifically, each invest- ment under consideration will draw on the capital account during each of its first three years, but in the long run, each is predicted to achieve a positive net present value (NPV). Listed here are the investment alternatives, their net pres- ent values, and their capital requirements, and all figures are in thousands of dollars. In addition, the amount of capital available to the investments in each of the next three years is predicted to be $9.5 million, $7.5 million, and $8.8 million, respectively. an f ws: Contribution Fixed Cost Demand oduct $1.20 290,000 S60,000 1.80 200,000 200,000 2.30 50,000 55,000 Project Basic Purchase Advertising Campaign One-Phase Two-Phase Test Expansion Expansion Market Research Equipment NPV 4,200 6,800 9,600 4,400 8,700 3,500 2,000 5,000 1,000 Year 1 Capital Year 2 Capital Year 3 Capital 3,000 2,500 6,000 1,000 3,500 4,000 1,500 1,000 500 4,000 3,500 5,000 1,800 4,000 900 Eac' 1on three machines. The stan a. Assuming that any combination of the investments is permitted, which ones should Perry make to maximize NPV? pr ctivities and capaciies b. What is the optimal NPV in the combination chosen in part (a)? c. Suppose that the expansion investments are mutually exclu- sive and only one of them can be made. How does this alter the solution in part (a)? d. Suppose that the test market cannot be carried out unless the advertising campaign is also adopted. How does this C contingency alter the solution in (a)? Hours per 1,000 Units Hours Ma e Product I Product J Product K Available A 3.205 3.846 7.692 1,900 B. 2.747 4.808 6.410 1,900 1.923 1,900 3.205 9.615 ing Stock. Poly Products sells packaging tape to indus- wiatns irom Ilmaster Ton, wnicn is 15 incnes wide, The
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Practical Management Science
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ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
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