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Question - AG is in the process of reviewing 10 proposals for new project, but the resources only available to work on new project for maximum 9750, hours during the year. The incremental profit and constrained resource required for the proposed project are listed below:
Proposed Project
Incremental Profit
Amount of the Constrained Resource Required
Project 1
36.400.000
2.600
Project 2
26.000.000
3.250
Project 3
3.900.000
1.950
Project 4
23.400.000
Project 5
15.600.000
3.900
Project 6
13.000.000
1.300
Project 7
10.400.000
650
Project 8
3.120.000
Project 9
7.800.000
Project 10
4.160.000
Total
143.780.000
19.500
Required -
a) Which of the proposed project should the company accept this year?
b) What would be the total incremental profit under your plan?
c) What is your opinion, why company's revenues and costs differ across customer?
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