Chapter 30. Using Solver for Capital Budgeting

  • How can a company use Solver to determine which projects it should undertake?

Each year, a company like Eli Lilly needs to determine which drugs to develop; a company like Microsoft, which software programs to develop; a company like Proctor & Gamble, which new consumer products to develop. The Solver feature in Microsoft Office Excel 2007 can help a company make these decisions.

  • How can a company use Solver to determine which projects it should undertake?

    • Most corporations want to undertake projects that contribute the greatest net present value (NPV), subject to limited resources (usually capital and labor). Let’s say that a software development company is trying to determine which of 20 software ...

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