Kloos Industries Has Projected the Availability of Capital Over Each

question 14

Essay

Kloos Industries has projected the availability of capital over each of the next three years to be $850,000,$1,000,000,and $1,200,000,respectively.It is considering four options for the disposition of the capital:
(1)Research and development of a promising new product
(2)Plant expansion
(3)Modernization of its current facilities
(4)Investment in a valuable piece of nearby real estate
Monies not invested in these projects in a given year will NOT be available for following year's investment in the projects.The expected benefits three years hence from each of the four projects and the yearly capital outlays of the four options are summarized in the table below in $1,000,000's.
In addition,Kloos has decided to undertake exactly two of the projects,and if plant expansion is selected,it will also modernize its current facilities.
Formulate and solve this problem as a binary programming problem.

---

Definitions:

Chapter 7 Liquidation

A bankruptcy process where a debtor's assets are sold off to pay creditors, leading to the closure of the business.

Insurance Company

A financial institution that provides various types of coverage to individuals and entities against potential future losses or damages.

Credit Union

A member-owned financial cooperative that provides traditional banking services.

Bankruptcy Abuse Prevention

Bankruptcy abuse prevention refers to legal measures designed to prevent individuals or businesses from exploiting the bankruptcy system to evade legitimate debts.