Problem 7-25 (Algorithmic)George Johnson recently inherited a large sum of money; he wants to use a portion of this money to set up a trust fund for his two children. The trust fund has two investment options: (1) a bond fund and (2) a stock fund. The projected returns overthe life of the investments are 5% for the bond fund and 30% for the stock fund. Whatever portion of the inheritance George finally decides to commit to the trust fund, he wants to invest at least 80% of that amount in the bond fund. In addition, hewants to select a mix that will enable him to obtain a total return of at least 6.5%.a. Formulate a linear programming model that can be used to determine the percentage that should be allocated to each of the possible investment alternatives. If required, round your answers to three decimal places.Let B =SMaxs.t.percentage of funds invested in the bond fundpercentage of funds invested in the stock fundOptimal solution: BValue of optimal solution isXX,S=BXBX1 ✔10 ✓ %BB+++XXSXSb. Solve the problem using the graphical solution procedure. If required, round the answers to one decimal place.1 ✓S✓X Bond fund minimumX Minimum return100 X Percentage requirement

The graphical approach is one of the methods used to solve linear programming problems graphically.…

Answered: George Johnson recently inherited a…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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