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CBmE+195+-+Chemical+Engineering+Economics+-+Problem+Set+_6+-+Fall+2010

CBmE+195+-+Chemical+Engineering+Economics+-+Problem+Set+_6+-+Fall+2010

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University of California at Berkeley Department of Chemical and Biomolecular Engineering Chemical and Biomolecular Engineering 195 Special Topics – Chemical Engineering Economics Fall 2010 PROBLEM SET #6 – Due November 16, 2010 at the start of class 21. The Process Engineering Manager of Acme Chemical Co. has four investment proposals available, as shown below. He believes that all of these proposals have a minimum of risk. Proposal D requires an intermediate which can be obtained via proposal A or proposal B. Funds available for investment are limited to $5,050,000 this year, and no more than 19 chemical engineers can accept a new project this year. Assume that the appropriate cost of capital for all four proposals equals 15%. a) Determine the best investment program based on profitability index rankings. b) Determine the best investment program using the matrix of feasible alternatives method. c) Based on the results from part a) and part b), provide a written explanation of what you would do if you were the Process Engineering Manager of Acme Chemical Co.
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