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Spencer Enterprises is attempting to choose among a series of new investment alternatives. The potential...

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Spencer Enterprises is attempting to choose among a series of new investment alternatives. The potential investment alternatives, the net present value of the future stream of returns, the capital requirements, and the available capital funds over the next three years are summarized as follows. Capital Requirements ($) Alternative Number Alternative Net Present Value ($) Year 1 Year 2 Year 3 1 Limited warehouse expansion 3,500 3,000 1,000 4,000 2 Extensive warehouse expansion 6,500 2,500 3,500 3,500 3 Test market new product 10,000 6,000 4,000 5,000 4 Advertising campaign 4.500 2,000 1,500 1,800 5 Basic research 8,500 5,000 1,000 4,000 Purchase new equipment 3,500 1,000 500 900 Capital funds available 10.500 7.000 8.750 (a) Develop an integer programming model for maximizing the net present value (in $). 1 if investment alternative / is selected Let x = 0 otherwise for i = 1, 2, 3, 4, 5, 6. Max0 s.t. Year 19000

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