Develop a linear programming model to minimize the total dollars needed to be invested now to meet the expansion cash needs in the next 8 years. Hint: this is the objective function. Use Excel Solver, solving method: Simplex LP. How many units of each security 1, 2, and 3 should the corporation purchase? What is the investment amount in each security 1, 2, and 3 in year 1? How much should the corporation place in the savings account in each of the 8 years? Assuming the corporation currently has $1.8 Million available cash to invest and given the cash needs for the expansion, is the investment plan that you developed feasible? Explain your answer and provide reasoning. I am unable to figure out how to calculate the optimal solution amounts so that I can calculate teh remaining items
Develop a linear programming model to minimize the total dollars needed to be invested now to meet the expansion cash needs in the next 8 years. Hint: this is the objective function. Use Excel Solver, solving method: Simplex LP. How many units of each security 1, 2, and 3 should the corporation purchase? What is the investment amount in each security 1, 2, and 3 in year 1? How much should the corporation place in the savings account in each of the 8 years? Assuming the corporation currently has $1.8 Million available cash to invest and given the cash needs for the expansion, is the investment plan that you developed feasible? Explain your answer and provide reasoning. I am unable to figure out how to calculate the optimal solution amounts so that I can calculate teh remaining items
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter9: Decision Making Under Uncertainty
Section: Chapter Questions
Problem 30P
Related questions
Question
- Develop a linear programming model to minimize the total dollars needed to be invested now to meet the expansion cash needs in the next 8 years. Hint: this is the objective function. Use Excel Solver, solving method: Simplex LP.
- How many units of each security 1, 2, and 3 should the corporation purchase? What is the investment amount in each security 1, 2, and 3 in year 1?
- How much should the corporation place in the savings account in each of the 8 years?
- Assuming the corporation currently has $1.8 Million available cash to invest and given the cash needs for the expansion, is the investment plan that you developed feasible? Explain your answer and provide reasoning.
I am unable to figure out how to calculate the optimal solution amounts so that I can calculate teh remaining items
![Scenario
Your corporation has just approved an 8-year expansion plan to grow its
market share. The plan requires an influx of cash in each of the 8 years.
Management wants to develop a financial plan to ensure the cash needed
for the expansion will be available at the beginning of each of the 8
years.
The corporation has the following investment options:
Security
Price per
Return Rate
Years to
unit
(%)
Maturity
$1,200
10.255
2
$1,000
6.7550
6.
$1,175
12.110
Savings
5.500
Account
3.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F08a607cb-6106-4cc4-b59c-f8d80484abfd%2F043182f6-ebd7-49b0-a7a5-276b199e49a4%2F03q1ou8_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Scenario
Your corporation has just approved an 8-year expansion plan to grow its
market share. The plan requires an influx of cash in each of the 8 years.
Management wants to develop a financial plan to ensure the cash needed
for the expansion will be available at the beginning of each of the 8
years.
The corporation has the following investment options:
Security
Price per
Return Rate
Years to
unit
(%)
Maturity
$1,200
10.255
2
$1,000
6.7550
6.
$1,175
12.110
Savings
5.500
Account
3.
![Each unit of security 1, 2, and 3 guarantees to pay $1,000 at maturity.
Investments in these securities must take place only at the beginning of
year 1 and will be held until maturity. Any funds not invested in
securities will be invested in a savings account-that pays the annual
interest rates noted above.
The following table summarizes the cash needs for the expansion plan
for each of the 8 years:
Year 1 = $250,000
Year 5 = $295,000
%3D
Year 2 = $300,000
Year 6 = $310,000
Year 3
$225,000
Year 7
$280,000
%D
Year 4 = $235,000
Year 8 =
$305,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F08a607cb-6106-4cc4-b59c-f8d80484abfd%2F043182f6-ebd7-49b0-a7a5-276b199e49a4%2F7owfxmr_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Each unit of security 1, 2, and 3 guarantees to pay $1,000 at maturity.
Investments in these securities must take place only at the beginning of
year 1 and will be held until maturity. Any funds not invested in
securities will be invested in a savings account-that pays the annual
interest rates noted above.
The following table summarizes the cash needs for the expansion plan
for each of the 8 years:
Year 1 = $250,000
Year 5 = $295,000
%3D
Year 2 = $300,000
Year 6 = $310,000
Year 3
$225,000
Year 7
$280,000
%D
Year 4 = $235,000
Year 8 =
$305,000
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 5 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, operations-management and related others by exploring similar questions and additional content below.Recommended textbooks for you
![Practical Management Science](https://www.bartleby.com/isbn_cover_images/9781337406659/9781337406659_smallCoverImage.gif)
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
![Practical Management Science](https://www.bartleby.com/isbn_cover_images/9781337406659/9781337406659_smallCoverImage.gif)
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,