Question: The Charm City recently purchased a 35 acre of farm land, and it has $500,000 budgeted to develop recreational facilities. They are considering the facilities for soccer fields, swimming pool, walking trails, and a children’s playground to develop. The following table shows the amount of acreage required by each project, the annual expected usage for each facility, and the cost to construct each facility. Also included is a priority designation determined by the town’s recreation committee based on several public hearings and their perceptions of the critical need of each facility.

Facility Annual Usage (people) Acres Cost ($) Priority

Swimming pool 15,000 6 125,000 1

Soccer fields 12,000 10 120,000 2

Playground 32,000 14 150,000 1

Walking trails 30,000 22 90,000 1

The total priority level cannot be more than 3. At least 2 facilities must be selected. Formulate a capital budgeting problem that will maximize the total annual usage by determining:

1. The decision variables.
2. The objective function. What does it represent?
3. All the constraints. What does each constraint represent?

Note: Do NOT solve the problem after formulating.

Price: $2.99

Solution: The downloadable solution consists of 2 pages
Deliverable: Word Document