1.

Recommended Percentage of each project

61% and 87% for Security Systems and Market Analysis respectively.

$ 2486956.52 is theNPV of total investment

2.

Capital Allocation plan is shown in figure below. (Blue Shade)

Total Recommended Investment is shown in Orange Shade for respective years.

Decision Variables 0.61 0.87 0.00

NPV (at 100
percent) 18,00,000.00 16,00,000.00
NPV 24,86,956.52

Constraints Coefficients lhs rhs diff

8,00,000.0
Year 1 6,00,000.00 5,00,000.00 8,00,000.00 0 0.00
7,00,000.0
Year 2 6,00,000.00 3,50,000.00 6,69,565.22 0 30,434.78
5,00,000.0
Year 3 2,50,000.00 4,00,000.00 5,00,000.00 0 0.00

Security Market Total

Systems Analysis Investment
Year 1 3,65,217.39 4,34,782.61 8,00,000.00
Year 2 3,65,217.39 3,04,347.83 6,69,565.22
Year 3 1,52,173.91 3,47,826.09 5,00,000.00
Capital Allocation plan
3.

Recommended Percentage of each project

69% and 82% for Security Systems and Market Analysis respectively.

$ 25,50,819.67is theNPV of total investment

4.

Capital Allocation plan is shown in figure below. (Blue Shade)

Total Recommended Investment is shown in Orange Shade for respective years.

Decision Variables 0.69 0.82 0.00

NPV (at 100
percent) 18,00,000.00 16,00,000.00
NPV 25,50,819.67

Constraints Coefficients lhs rhs diff

9,00,000.0 77,049.1
Year 1 6,00,000.00 5,00,000.00 8,22,950.82 0 8
7,00,000.0
Year 2 6,00,000.00 3,50,000.00 7,00,000.00 0 0.00
5,00,000.0
Year 3 2,50,000.00 4,00,000.00 5,00,000.00 0 0.00

Security Market Total

Systems Analysis Investment
Year 1 4,13,11,475.24 4,09,83,606.80 8,22,95,082.04
Year 2 4,13,11,475.24 2,86,88,524.76 7,00,00,000.00
Year 3 1,72,13,114.68 3,27,86,885.44 5,00,00,000.12
Capital Allocation plan

5.

Yes. They should invest additional funds.

As can be seen $63863 is the increment in NPV where as the slack value increases to $77049.18 from
$30434.78 totalling $47000 which when reinvested again will result in greater avenues for profit.

Thus the total return from additional $100000 will be $110000 and interest on $47000. This
represents a very profitable arrangement.