Capital Co

question 101

Multiple Choice

Capital Co. is considering which of five different projects to undertake in order to maximize its net present value (NPV) . Define X_i as a binary (0-1) variable that equals 1 if project i is undertaken and 0 otherwise, for i = 1,2,3,4,5. The NPV and required capital (in thousands) for each project are listed below.
Project Net Present Value Capital Required
1 60 7
2 50 10
3 40 6
4 20 3
5 30 12
What is the proper objective function?

• A) Max X₁ + X₂ + X₃ + X₄ + X₅
• B) Min 60X₁ + 50X₂ + 40X₃ + 20X₄ + 30X₅
• C) Max 7X₁ + 10X₂ + 6X₃ + 3X₄ + 12X₅
• D) Max 60X₁ + 50X₂ + 40X₃ + 20X₄ + 30X₅
• E) Min 7X₁ + 10X₂ + 6X₃ + 3X₄ + 12X₅

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Definitions:

Mechanoreceptor

Sensory receptor that responds to mechanical stimuli, such as pressure, sound waves, or gravity.

Photoreceptor

Sensory receptor that responds to light stimuli.

Proprioceptor

Class of mechanoreceptor responsible for maintaining the body’s equilibrium and posture; involved in reflex actions.

Organ of Corti

The sensory organ located within the cochlea of the inner ear, responsible for converting sound vibrations into nerve impulses.