Question

The Tatham Company is considering seven investments. The cash required for each investment and the net present value (NPV) each investment adds to the firm are given in the table below. The cash available for investment is $15,000. The crucial assumption here is that if Tatham wishes to take part in any of these envestments, it must go "all the way". It cannot, for example go halfway in investment 1 by investing $2,500 and realizing an NPV of $8,000. If partial investments were allowed we could use our typical linear programming (like the portfolio selection problem). In this case we must use binary programming. Tatham wants to find the investment policy that maximizes its NPV. . "Using the optimal solution that is given {add the following constraints to the problem and solve it again."At most 2 of the first 4 projects can be selected. B. If investment 1 is selected, then investment 2 must also be selected. (However, this does NOT mean that if investment 2 is selected, then investment 1 must also be selected.) C. At least 1 of the last three projects (5-7) must be selected. D. Format your constraints appropriately.(my question)}ADD THE FOLLOWING CONSTRAINTS TO OPTIMAL SOLUTION THAT IS GIVEN. ADD THE FOLLOWING CONSTRAINTS TO THE PROBLEM AND USE EXCEL SOLVER TO SOLVE AGAIN

Input data on potential investments
Investment	1	2	3	4	5	6	7
Investment cost	$5,000	$2,500	$3,500	$6,000	$7,000	$4,500	$3,000
NPV	$16,000	$8,000	$10,000	$20,000	$22,000	$12,000	$8,000
NPV per investment dollar
Investment levels	1	1	0	0	1	0	0
Budget constraint
	Amt invested		Budget
	$14,500	<=	$15,000
Total NPV	$46,000

Answer 1

Formula