Use the Information in the Table (All Times Are in Days)to

question 36

Multiple Choice

Use the information in the table (all times are in days) to determine the lowest extra cost for an 18-day project if the base cost for each activity finished in normal time is $1,000. $\begin{array}{|l|l|l|l|l|} \hline&\text { Normal }&\text {Minimum}&\text { Crash Cost }\\ \text {Activity}&\text {Time}&\text {Time}&\text { (\$/day) }& \text { Predecessor }\\\hline \mathrm{A}& 10 & 6 & \$ 70 & -- \\ \hline \mathrm{B} & 6 & 3 & \$ 40 & -- \\\hline\mathrm{C} & 2 & 2 & - &\mathrm{B } \\\hline\mathrm{D} & 4 & 2 & \$ 60 &\mathrm{ C } \\\hline \mathrm{E} & 6 & 4 & \$ 80 &\mathrm{ A } \\\hline\mathrm{F} & 8 & 5 & \$ 90 & \mathrm{D},\mathrm{ E }\\\hline \end{array}$

• A)$400
• B)$420
• C)$440
• D)$460

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Definitions:

Corporate Finance

The division of finance that deals with financing, capital structuring, and investment decisions in corporations.

Optimal Choice

The best possible selection among various alternatives based on certain criteria or constraints.

Project Alternatives

Project alternatives are different ways to achieve the objectives of a project, considered during the planning phase to select the most efficient method.

Capital Structure

The mix of a company's long-term debt, specific short-term debt, common equity, and preferred equity which constitutes the firm's financing of its operations and growth.