Consider the following capital rationing problem:
Project C0 C1 C2 NPV
W -10,000 -10,000 0 +6,700
X 0 -20,000 +5,000 +9,000
Y -10,000 +5,000 +5,000 +0
Z -15,000 +5,000 +4,000 -1,500
Financing Available 20,000 20,000 20,000
Set up this problem as a linear program and solve it.
Note: You can allow partial investments, that is, " 0 ≤ x ≤ 1." Calculate and interpret the shadow prices on the capital constraints.
