A Linear Programming Maximization Problem Has Been Solved

question 69

Multiple Choice

A linear programming maximization problem has been solved. In the optimal solution, two resources are scarce. If an added amount could be found for only one of these resources, how would the optimal solution be changed?

• A) The shadow price of the added resource will rise.
• B) The solution stays the same; the extra resource can't be used without more of the other scarce resource.
• C) The extra resource will cause the value of the objective to fall.
• D) The optimal mix will be rearranged to use the added resource, and the value of the objective function will rise.
• E) none of the above

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Definitions:

Net Present Value

A calculation of the present value of cash inflows minus the present value of cash outflows over a period of time, used in capital budgeting.

Salvage Value

Salvage value is the estimated resale or scrap value of an asset at the end of its useful life.

Capital Budgeting

The process by which a business evaluates and selects long-term investments that are likely to add value to the company.

Highly Uncertain

Refers to situations or outcomes with a very high level of unpredictability or risk, often due to a lack of information or complex variables.