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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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