Saba Conducts Regular Tours of His Favorite City in the World

question 50

Multiple Choice

Saba conducts regular tours of his favorite city in the world, Paris. Each semester he selects among the finest students in the university and escorts them to the City of Lights. In addition to a world-class education on conducting business in Europe, he arranges a number of cultural outings for them to help them immerse themselves in all that France has to offer. He collects an extra $100 from each student for this purpose and limits his tour group to ten lucky individuals. Some of the events (and their prices) he proposes to the students include:
Eiffel Tower visit, $40 per student, E
Paris Sewer spelunking, $20 per student, S
Half day passes to the Louvre, $60 per student, L
Bon Beret tour, $50 per student, B
So much to do and so little time!
-Which constraint is most appropriate if the students can choose only three of these activities?

• A) E + S + L + B ≤ 3
• B) $40E + $20S + $60L + $50B ≤ $100
• C) E + S + L + B ≥ 2
• D) E + S + L + B ≤ 4

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Definitions:

Independent Projects

Projects in a company that can be selected or rejected independently of one another, without affecting the profitability or potential of other projects.

Conventional Cash Flows

A series of net income figures expected to be generated by an investment, starting with a negative cash flow at the beginning (investment outlay), followed by a series of positive cash flows.

Internal Rate of Return

The rate of discount at which the total net present value of a project or investment's cash inflows and outflows balances out to zero.

Conventional Cash Flows

Cash flow patterns characterized by an initial outflow (investment) followed by a series of positive cash inflows.