Note: This Problem Requires the Use of a Linear Programming $$x _ { j } = \left\{ \begin{array} { l } 1 , \text { if project } j \text { is selected } \\0 , \text { otherwise }\end{array} \right.$$

question 1

Multiple Choice

Note: This problem requires the use of a linear programming application such as Solver or Analytic Solver.
A firm has prepared the following binary integer program to evaluate a number of potential new capital projects. The firm's goal is to maximize the net present value of their decision while not spending more than their currently available capital.
Max 100x1 + 120x2 + 90x3 + 135x4
s.t. 150x1 + 200x2 + 225x3 + 175x4 ? 500 {Constraint 1}
X1 + x2 + x3 + x4 ? 2 {Constraint 2}
X2 + x4 ? 1 {Constraint 3}
X2 + x3 ? 1 {Constraint 4}
X1 = x4 {Constraint 5} $$x _ { j } = \left\{ \begin{array} { l } 1 , \text { if project } j \text { is selected } \\0 , \text { otherwise }\end{array} \right.$$
Set up the problem in Excel and find the optimal solution. What is the expected net present value of the optimal solution?

• A) 210
• B) 220
• C) 235
• D) 310
• E) 435

Understand the process and implications of asset impairment, including loss calculations.

Understand the differences, applications, and impacts of various depreciation methods on financial statements.

Learn the accounting treatments for disposal of assets, including calculations of gain or loss.

Grasp the concept and treatment of Modified Accelerated Cost Recovery System (MACRS) for tax purposes.

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