Riker Co is considering which of 4 different projects to undertake in order to maximize its net present value (NPV). Define Xi as a binary variable that equals 1 if project i is undertaken and 0 otherwise, for
i = 1, 2, 3, 4.
The NPV and required capital (in millions) for each project are listed below.
Project Net Present Value Capital Required
1 60 7
2 50 10
3 40 6
4 20 3
Which of the following represents the constraint(s) stating that project 1 must be undertaken and at least one of the other projects must be undertaken?
A) X1 + X2 ? 1, and X1 + X3 ? 1, and X1 + X4 ? 1
B) X1 ?1, and X2 + X3 + X4 ? 1
C) X1 + X2 ? 1, and X1 + X3 ? 1, and X1 + X4 ? 1
D) X1 ?1, and X2 + X3 + X4 ? 3
E) X1 + X2 + X3 + X4 ? 2
B
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