Crossover rate is the cost of capital at which the net present values of two projects are equal. Crossover rate is useful in capital budgeting analysis because it tells the investing company about the cost of capital at which both of the mutually-exclusive projects are equally good. …

Why is the crossover rate important?

Crossover rate is the cost of capital at which the net present values of two projects are equal. Crossover rate is useful in capital budgeting analysis because it tells the investing company about the cost of capital at which both of the mutually-exclusive projects are equally good. …

Why encoding is used in genetic algorithm?

In genetic algorithm, an encoding function is use to represent mapping of the object variables to a string code and mapping of string code to its object variable is achieve through decoding function as shown in figure 1.

What are the steps of genetic algorithm?

Five phases are considered in a genetic algorithm:

  • Initial population.
  • Fitness function.
  • Selection.
  • Crossover.
  • Mutation.

What is a crossover point?

A crossover works using the principle of electronic filters to filter out (block) a range of musical sound frequencies as desired. A crossover frequency is the sound frequency that starts the cutoff point for crossover filters. It’s the frequency point at which signals are reduced by 3 decibels (represented as -3dB)

What is encoding in genetic algorithm?

Binary Encoding : Most common methods of encoding. Chromosomes are string of 1s and 0s and each position in the chromosome represents a particular characteristics of the problem. Value Encoding : Used in problems where complicated values, such as real numbers, are used and where binary encoding would not suffice.

What is the crossover point in exercise?

As exercise intensity increases, the body prefers to use carbohydrate for energy. The crossover point is the intensity, typically a percentage of VO2max, where fat and carbohydrate intersect with the energy from fat decreasing and the energy from carbohydrate increasing.

What is the formula of profitability index?

The profitability index is calculated by dividing the present value of future cash flows that will be generated by the project by the initial cost of the project. A profitability index of 1 indicates that the project will break even. If it is less than 1, the costs outweigh the benefits.

What are the two main features of genetic algorithm?

Answer. Answer: three main component or genetic operation in generic algorithm are crossover , mutation and selection of the fittest.

Which type of crossover is included in genetic algorithm?

Two-point and k-point crossover In two-point crossover, two crossover points are picked randomly from the parent chromosomes. The bits in between the two points are swapped between the parent organisms. Two-point crossover is equivalent to performing two single-point crossovers with different crossover points.

How do I calculate Mirr in Excel?

Excel MIRR Function

  1. Summary.
  2. Calculate modified internal rate of return.
  3. Calculated return as percentage.
  4. =MIRR (values, finance_rate, reinvest_rate)
  5. values – Array or reference to cells that contain cash flows.
  6. Version.
  7. The standard Internal rate of return function (IRR) assumes all cash flows are reinvested at the same rate as the IRR.

What is the first step when calculating the crossover rate?

What is the first step when calculating the crossover rate? To calculate the cash flow differences between each project.

How do you calculate crossover points?

The crossover point formula looks like this:​

  1. Calculate the cash flows for the first and second projects.
  2. Calculate the difference between the (a) initial capital of both projects and (b) each periodic cash flows.
  3. Compute the IRR by equating the net present value equation of the resulting differential cash flows to zero.

What is population size in genetic algorithm?

In Genetic Algorithm, the population size is an important parameter which directly influences the ability to search an optimum solution in the search space. Many researchers have revealed that having a large number of population leads to the accuracy of getting an optimal solution.

How is mutation used in genetic algorithm?

A common method of implementing the mutation operator involves generating a random variable for each bit in a sequence. This random variable tells whether or not a particular bit will be flipped. This mutation procedure, based on the biological point mutation, is called single point mutation.

What is the crossover technique?

In crossover techniques, the simplest approach is single-point crossover (Fig. 1), where paired individuals are each cut at a randomly chosen crossover site, and the portions after the cuts are exchanged to form two new (child) individuals.

How is Mirr calculated?

Alternatively, the MIRR can be easily calculated in spreadsheet applications such as Microsoft Excel. For example, in MS Excel, it can be calculated using the function called “=MIRR (cash flows, financing rate, reinvestment rate).”

How do you find the IRR?

The IRR Formula Broken down, each period’s after-tax cash flow at time t is discounted by some rate, r. The sum of all these discounted cash flows is then offset by the initial investment, which equals the current NPV. To find the IRR, you would need to “reverse engineer” what r is required so that the NPV equals zero.

What is genetic algorithm with example?

A genetic algorithm is a search heuristic that is inspired by Charles Darwin’s theory of natural evolution. This algorithm reflects the process of natural selection where the fittest individuals are selected for reproduction in order to produce offspring of the next generation.

How many types of crossovers are there?

In this paper, the crossover operators are classified in three categories such as standard crossovers, binary crossovers and real/tree crossover s which are application dependant. The Section 2 explains standard crossovers, which are application independent.

What are the weaknesses of PBP method?

Ignores Time Value of Money As per the concept of the time value of money, the money received sooner is worth more than the one coming later because of its potential to earn an additional return if it is reinvested. The PBP method doesn’t consider such a thing, thus distorting the true value of the cash flows.

What is elitism in genetic algorithm?

Elitism only means that the most fit handful of individuals are guaranteed a place in the next generation – generally without undergoing mutation. It suggests duplicating the most fit individual – that individual gets two reserved slots in the next generation. One of these slots is mutated, the other is not.

When choosing between mutually exclusive projects What is the best method to use?

When choosing between mutually exclusive projects, the highest NPV is always the best option. Based upon the following data, which of the following mutually exclusive projects should you choose if your required return is 10%?

Where is genetic algorithm used?

Optimization − Genetic Algorithms are most commonly used in optimization problems wherein we have to maximize or minimize a given objective function value under a given set of constraints. The approach to solve Optimization problems has been highlighted throughout the tutorial.

What is the first step in the net present value process?

The first step to determine the NPV is to estimate the future cash flows that can be expected from the investment, then use the appropriate discount rate to discount the future cash flows so that they can be compared with the initial investment cost.

Why crossover is important in genetic algorithm?

The search for the best solution (in genetic algorithms) depends mainly on the creation of new individuals from the old ones. The process of crossover ensures the exchange of genetic material between parents and thus creates chromosomes that are more likely to be better than the parents.

Which one of the following are encoding methods used in GA?

Binary encoding is the most common, mainly because first works about GA used this type of encoding. In binary encoding every chromosome is a string of bits, 0 or 1. On the other hand, this encoding is often not natural for many problems and sometimes corrections must be made after crossover and/or mutation.

How do you do a crossover in genetic algorithm?

Create two random crossover points in the parent and copy the segment between them from the first parent to the first offspring. Now, starting from the second crossover point in the second parent, copy the remaining unused numbers from the second parent to the first child, wrapping around the list.

What is crossover rate in genetic algorithm?

1. Crossover rate (probability): the number of times a crossover occurs for chromosomes in one generation, i.e., the chance that two chromosomes exchange some of their parts), 100% crossover rate means that all offspring are made by crossover. Crossover rate is in the range of [0, 1] [43].