Determine the number of acceptable mutually exclusive bundles for the four independent…

Question:

Determine the number of acceptable mutually exclusive bundles for the four independent projects described below if the investment limit is $400,000 and the following project selection restriction applies: Project 1 can be selected only if projects 3 and 4 are selected.

(a) <7


(b) 7


(c) 10


(d) 12

Answer:

With 4 independent projects, total no. of mutually exclusive bundles formation would be. However, with condition of investment limit of $400,000, and selection of project 1 with projects 3 and 4 make project 2, 3, 4, 23, 24, 34 and DO NOTHING as only acceptable bundles.

Hence, total 7 no. of mutually exclusive bundles are acceptable. Hence, option  is the correct answer.

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