Concept explainers
Explanation of Solution
Maximizing the Net Present Value (NPV):
According to the given information, a company contains 9 projects under consideration. Each project the NPV is added and the capital required by every project during the next two years.
Now consider “xi” be the fraction of investment that is undertaken as i = 1, 2, K, 9
The objective function is to maximize the NPV of the investment.
Maximize
Constraint 1:
At 1st year, $50 million is available for investment.
The expression is:
Constraint 2:
At 2nd year, $20 million is available for investment.
The expression is:
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Chapter 3 Solutions
Introduction to mathematical programming
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