A company is considering investing up to 15 million dollars


Question: A company is considering investing up to 1.5 million dollars in an investment portfolio consisting of a set of the following five independant capital projects (all of these projects will end at the end of 10 years.) The initial investment for Project 1,2,3,4,5 is $300k, $400k, $450k, $500k, and $600k respectively. The annual return for these projects are $80k, $100k, $105k, $125k, and $140k and the salvage value for these projects at the end of te year 10 are $50k, $50k, $60k, $75k and $75k respectively. Projects 2 nad 4 are meutally excluse. Also, project 1 is contingent on either or both projects 2 and 3. the company's MARR is 10%. Determine the optimal investment profolio given that

a) The investment opportunites are indivisible

b) the investment oppertunites are divisible

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Finance Basics: A company is considering investing up to 15 million dollars
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