@ 96% [.) Tue 9:52 AM a E ure https://elearning.utdallas.edu/webapps/ course-ass

Question

@ 96% [.) Tue 9:52 AM a E ure https://elearning.utdallas.edu/webapps/ course-assess T QUESTION 13 15 points Save A future investments for the coming two years, and is considering four construction projects. The capital investment details for the next two years are given in the table below Capital Requirements ($1,000,000s) ProjectA Preject B Project C Project Year 1 Capital Year 2 Capital $25.00 $1500 $8.00 $10.00 $3000 $21.00 $9.50 $7.00 The net present value of these four projects is $60M, $40M, $25.5M, and $18M respectively. The Healthcare Provider Organization plans to invest $35M·nd$62M i'Yoar 1 and Ye" 2 respectively. Develop and solve a capital project planning model Indicate Projectisl your planning model recommends with a Y for Yes, or N for Na for maximizing net present value. . Project A (Y/N Project B MN · Project CMN · Project DON What is the maximized Net Present Value? Whatthe name of your spreadsheet n the Exana vertook nor partial credt oonsiderations,- Save your spreadsheet after you have completed this Clhick Sove and Submit to save and ssbmit. Chick Save All Anuers to save all answers MacBook Air delete 0

Explanation / Answer

Lets say A was chosen, then out of 35m, 10m would remain in year 1..possible projects would be C or D
Lets say B was chosen, then out of 35m, 20m would remain in year 1..possible projects would be C and D

The projects satifying the capital budget are:
A,D 78
A,C 85.5
B,C,D 83.5

We see NPV is maximised in A,C..Maximized NPV is 85.5 m

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