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    Hart Venture Capital Analysis

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    Ishan Shah
    The document discusses two capital allocation plans for investment in security systems and market analysis projects. The first plan recommends 61% allocation to security systems and 87% to market analysis, with a total NPV of $2,486,956.52. The second plan recommends 69% to security systems and 82% to market analysis, increasing the total NPV to $25,50,819.67. Both plans provide allocation amounts for each of the three investment years. It is recommended that additional funds be invested, as the increased allocation results in over $100,000 more in available funds.

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    Hart Venture Capital Analysis

    Uploaded by

    Ishan Shah
    79 views2 pages
    The document discusses two capital allocation plans for investment in security systems and market analysis projects. The first plan recommends 61% allocation to security systems and 87% to market analysis, with a total NPV of $2,486,956.52. The second plan recommends 69% to security systems and 82% to market analysis, increasing the total NPV to $25,50,819.67. Both plans provide allocation amounts for each of the three investment years. It is recommended that additional funds be invested, as the increased allocation results in over $100,000 more in available funds.

    Original Description:

    Critical Analysis of Hart Venture Case study in Operation Research

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    The document discusses two capital allocation plans for investment in security systems and market analysis projects. The first plan recommends 61% allocation to security systems and 87% to market analysis, with a total NPV of $2,486,956.52. The second plan recommends 69% to security systems and 82% to market analysis, increasing the total NPV to $25,50,819.67. Both plans provide allocation amounts for each of the three investment years. It is recommended that additional funds be invested, as the increased allocation results in over $100,000 more in available funds.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    79 views2 pages

    Hart Venture Capital Analysis

    Uploaded by

    Ishan Shah
    The document discusses two capital allocation plans for investment in security systems and market analysis projects. The first plan recommends 61% allocation to security systems and 87% to market analysis, with a total NPV of $2,486,956.52. The second plan recommends 69% to security systems and 82% to market analysis, increasing the total NPV to $25,50,819.67. Both plans provide allocation amounts for each of the three investment years. It is recommended that additional funds be invested, as the increased allocation results in over $100,000 more in available funds.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    of 2

    1.

    Recommended Percentage of each project


    61% and 87% for Security Systems and Market Analysis respectively.
    $ 2486956.52 is theNPV of total investment
    2.
    Capital Allocation plan is shown in figure below. (Blue Shade)
    Total Recommended Investment is shown in Orange Shade for respective years.

    Decision
    Variables
    NPV (at 100
    percent)
    NPV

    0.61
    0.87
    18,00,000.0 16,00,000.0
    0
    0
    24,86,956.52

    Constraints

    Coefficients

    Year 1

    6,00,000.00

    5,00,000.00

    Year 2

    6,00,000.00

    3,50,000.00

    Year 3

    2,50,000.00

    4,00,000.00

    Year 1
    Year 2
    Year 3

    0.00

    lhs

    rhs
    dif
    8,00,000
    8,00,000.00
    .00
    0.00
    7,00,000 30,434.7
    6,69,565.22
    .00
    5,00,000
    5,00,000.00
    .00
    0.00

    Security
    Market
    Total
    Systems
    Analysis
    Investment
    3,65,217.39 4,34,782.61
    8,00,000.00
    3,65,217.39 3,04,347.83
    6,69,565.22
    1,52,173.91 3,47,826.09
    5,00,000.00
    Capital Allocation plan

    3.
    Recommended Percentage of each project
    69% and 82% for Security Systems and Market Analysis respectively.
    $ 25,50,819.67is theNPV of total investment

    4.
    Capital Allocation plan is shown in figure below. (Blue Shade)
    Total Recommended Investment is shown in Orange Shade for respective years.

    Decision
    Variables
    NPV (at 100
    percent)
    NPV

    0.69
    0.82
    18,00,000.0 16,00,000.0
    0
    0
    25,50,819.67

    Constraints

    Coefficients

    Year 1

    6,00,000.00 5,00,000.00

    Year 2

    6,00,000.00 3,50,000.00

    Year 3

    2,50,000.00 4,00,000.00

    Year 1
    Year 2
    Year 3

    0.00

    lhs

    rhs
    dif
    9,00,000 77,049.
    8,22,950.82
    .00
    18
    7,00,000
    7,00,000.00
    .00
    0.00
    5,00,000
    5,00,000.00
    .00
    0.00

    Security
    Market
    Total
    Systems
    Analysis
    Investment
    4,13,11,475. 4,09,83,606 8,22,95,082.
    24
    .80
    04
    4,13,11,475. 2,86,88,524 7,00,00,000.
    24
    .76
    00
    1,72,13,114. 3,27,86,885 5,00,00,000.
    68
    .44
    12
    Capital Allocation plan

    5.
    Yes. They should invest additional funds.
    As can be seen $63863 is the increment in NPV where as the slack value
    increases to $77049.18 from $30434.78 totalling ~$110000 which is greater
    than $100000. The idle amount can be reinvested again thus resulting in greater
    avenues for profit.

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