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**Solve in Excel** The Chief Financial Officer of Eaton Medical Devices has determined that the firm’s capital investment budget will be $5,000,000 for the upcoming year. Unfortunately, this amount is not sufficient to cover all of the positive NPV projects available to the firm.   Project Cost NPV A $1,061,191 $122,737 B 561,758 58,102 C 1,647,849 280,660 D 1,026,020 89,365 E 191,870 17,568 F 1,333,625 76,960 G 3,102,642 123,240 H 275,568 79,367 I 2,044,070 60,506 J 1,017,567 56,690   You have been asked to choose which investments should be made.   Using the Solver, determine which of the above projects should be included in the budget if the firm’s goal is to maximize shareholder wealth (Note: Set the Solver to use the Simplex LP method, and turn off the Ignore Integer Constraints setting.)

**Solve in Excel** The Chief Financial Officer of Eaton Medical Devices has determined that the firm’s capital investment budget will be $5,000,000 for the upcoming year. Unfortunately, this amount is not sufficient to cover all of the positive NPV projects available to the firm.   Project Cost NPV A $1,061,191 $122,737 B 561,758 58,102 C 1,647,849 280,660 D 1,026,020 89,365 E 191,870 17,568 F 1,333,625 76,960 G 3,102,642 123,240 H 275,568 79,367 I 2,044,070 60,506 J 1,017,567 56,690   You have been asked to choose which investments should be made.   Using the Solver, determine which of the above projects should be included in the budget if the firm’s goal is to maximize shareholder wealth (Note: Set the Solver to use the Simplex LP method, and turn off the Ignore Integer Constraints setting.)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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  1. **Solve in Excel**
  2. The Chief Financial Officer of Eaton Medical Devices has determined that the firm’s capital investment budget will be $5,000,000 for the upcoming year. Unfortunately, this amount is not sufficient to cover all of the positive NPV projects available to the firm.

 

Project

Cost

NPV

A

$1,061,191

$122,737

B

561,758

58,102

C

1,647,849

280,660

D

1,026,020

89,365

E

191,870

17,568

F

1,333,625

76,960

G

3,102,642

123,240

H

275,568

79,367

I

2,044,070

60,506

J

1,017,567

56,690

 

You have been asked to choose which investments should be made.

 

  1. Using the Solver, determine which of the above projects should be included in the budget if the firm’s goal is to maximize shareholder wealth (Note: Set the Solver to use the Simplex LP method, and turn off the Ignore Integer Constraints setting.)
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