Select the correct answer from the terms provided to complete the sentences below. There are more answers than questions, therefore some of the items will remain unused. 8 Each project Independently Only one 2m 2(m-1) Match each of the options above to the items below. The capital budgeting method allows 3 10 End of longest-lived project x=1 project(s) to be selected. 11 The total possible number of mutually exclusive bundles from m independent projects is 2m-1 LCM of all projects The capital budget limitation in a capital budgeting problem is applied to the initial Investment of The linear programming solution of a capital budgeting problem requires that each decision variable have a value of 5 12 For Independent project analysis, the assumed reinvestment rate on positive net cash flows is at the MARR from the time realized until the x is between 0 and 1 Each mutually exclusive bundle x = 0 or 1 More than one 8

Capitalized cost: Select one: a. is the future sum needed to provide a perpetual series of cash flows that will support a capital project. b. is a special kind of present worth analysis that chooses between alternatives with different duration c. is the net present value (NPV) of a perpetual series of cash flows d. is a cash flow series that allows the principal to be withdrawn every year and the amortization will always remain

Define the term Net Present Worth in the present worth analysis?

Assume a pool of 115 people in an insurance pool (a group of people insured through community rating). It is estimated that a small number in the pool will have significant pre- existing conditions as indicated in the table. Based on the age of these 115 people, the insurance company estimates the following distribution of health care claims (which includes necessary profit and administrative costs of the insurance company). Number of Insured Antidipated Heath Costs/Year/Person $1,400 $1,500 $1,600 $1,700 $1,800 $1,900 $2,000 $2,100 $2,200 $2.300 $2,400 $2,500 $2,700 $2,000 $2,900 $3,000 $3,100 $3.200 $3.300 $4,000 57,00 $10,000 Everyone joins the poal ad pays the necessary premum in the first year. The clams experience of the customers is faund to be generaly consstent with expeclations of the insurance company. A) What would be the premium In the third year if there is no inflation, based on the company's oxperience from the past year? B) If those customers who have anticipated…