Note: This Problem Requires the Use of a Linear Programming

question 41

Multiple Choice

Note: This problem requires the use of a linear programming application such as Solver or Analytic Solver.
Your employer is trying to select from a list of possible capital projects. The projects, along with their cost and benefits, are listed below. The capital budget available is $1 million. In addition to spending constraints, your employer would like to select at least two projects. If project 1 is chosen then project 2 cannot be selected. Formulate the problem as a linear program and determine the optimal solution.
$$\begin{array} { c c c c } \text { Project } & \text { Cost } & \text { Net Presert Value } & \text { Notes } \\1 & \$ 250,000 & \$ 500,000 & \text { Carrnot be selected if } 2 \text { is selected } \\2 & \$ 500,000 & \$ 750,000 & \text { Carrot be selected if } 1 \text { is selected } \\3 & \$ 290,000 & \$ 333,000 & \\4 & \$ 650,000 & \$ 400,000 & \\5 & \$ 750,000 & \$ 600,000 &\end{array}$$

• A) Project 1 and project 2
• B) Project 1 and project 3
• C) Project 1 and project 5
• D) Project 2 and project 3
• E) Project 3 and project 5

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Definitions:

Wet Environments

Areas characterized by high moisture levels, which can significantly influence local ecosystems and geology.

Clastic Sedimentary Rocks

Clastic sedimentary rocks are formed from the accumulation and lithification of mechanical weathering debris, consisting mostly of fragments of older rocks.

Sociotechnical

Relating to the interaction between social and technical elements within an organization, focusing on the relationships between people and technology in work environments.

Cohesive

Characterized by unity and sticking together; forming a whole or working closely as a unified entity.