Capital Budgeting Division Marr Corporation Allocated 160 Million Capital Projects Year Ma Q32604088

Capital Budgeting

A division of the Marr Corporation has been allocated $160million for capital projects this year. Managers in

the division have examined various possibilities and havepurposed 5 projects for consideration

P1 Implement new information system

P2 License a new technology from another firm

P3 Build state of the art recycling facility

P4 More receiving department to new facilities on site

P5 Install automated machining center in production

This is just one project of each type. Each project has aestimated NPV (net present value) and

each requires a capital expenditure.

P1 P2 P3 P4 P5

NPV 10 17 6 8 14

Expenditure 48 96 80 32 64

The corporation would like to maximize the NPV subject to thebudget of $160M

linear programming