An electronic company is contemplating to invest in five projects to improve its operation in...
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Accounting
An electronic company is contemplating to invest in five projects to improve its operation in the manufacture of high density compact disc. The company has a budget of PhP10 million. It is required that the company has to invest in at least 1 project. The following are the information provided by the company on the four projects:
Project
Investment Per Project
(in Million Pesos)
Number of Projects
Per Project
Revenue
(in Million Pesos)
Cost
(in Million Pesos)
Operating Expenses
(in Million Pesos)
A
2.0
2
3.75
1.25
0.10
B
2.0
3
5.25
2.50
0.15
C
1.0
2
5.75
1.30
0.20
D
1.0
3
5.35
1.20
0.25
E
2.0
3
4.55
1.05
1.30
a) Define Stage
b) Define State
c) Define the Decision Alternative
d) Starting with Project E as Stage 5, what is the recursive equation at this stage?
e) What is the minimum state at Stage 5? 1
f) What is the minimum state at Stage 3 (Project C)? 3
g) What is the optimal reward at State 10 in Stage 4 (Project D)?
h) What is the minimum state at Stage 1 (Project A)?
i) What is the optimal profit at stage 1?
j) Is there an alternative solution (Answer Yes or No)?
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