Response to the following problem:
MidWest Amusements is in the process of reviewing 10 proposals for new rides at its theme parks in cities scattered throughout the American heartland. The company's only experienced safety engineer must carefully review plans and monitor the construction of all new rides. However, she is only available to work on new rides for 1,590 hours during the year. The net present values and the amount of safety engineer time required for the proposed rides are listed below:
|
Proposed Ride
|
Net Present Value
|
Safety Engineer
Time Required
(hours)
|
|
Ride 1
|
$1,268,200
|
340
|
|
Ride2
|
1,152,000
|
360
|
|
Ride 3
|
649,600
|
320
|
|
Ride4
|
644,100
|
190
|
|
Ride 5
|
540,000
|
250
|
|
Ride 6
|
539,200
|
160
|
|
Ride7
|
462,000
|
110
|
|
Ride 8
|
457,200
|
360
|
|
Ride9
|
403,200
|
180
|
|
Ride 10
|
387,500
|
250
|
|
Total
|
$6, 503,000
|
|
2,520
|
Required:
Which of the proposed rides should the company build this year?
What would be the total net present value of the rides built under your plan?