14th Edition

ISBN: 9781323907733

Author: Barnett

Publisher: INTER PEAR

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Chapter 6.4, Problem 40E

In Problems 39-47, construct a mathematical model in the form of a linear programming problem. Do not solve.

Loan distributions. A savings and loan company has $ 3 million to lend. The types of loans and annual returns offered are given in the table. State laws require that at least 50 % of the money loaned for mortgages must be for first mortgages and that at least 30 % of the total amount loaned must be for either first or second mortgages. Company policy requires that the amount of signature and automobile loans cannot exceed 25 % of the total amount loaned and that signature loans cannot exceed 15 % of the total amount loaned. How much money should be allocated to each type of loan in order to maximize the company’s return?

Chapter 6.4, Problem 40E, In Problems 39-47, construct a mathematical model in the form of a linear programming problem. Do

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Chapter 6.4, Problem 39E

Chapter 6.4, Problem 41E

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Nanaimo Inn has 60 rooms and expects occupancy to be 70%. The owner wants to earn 10% return on total assets after tax. Total assets: $2,400,000 Income tax rate: 25% Depreciation: straight line (20 years) on assets of $1,600,000 (no salvage) $300,000 Other fixed expenses: Direct costs: $100,000 $200,000 10% on balance owing of $900,000 Annual principal payment Indirect costs Mortgage interest: Mortgage principal: required: $45,000 Room service has an operating loss of $50,000 Calculate the average required room rate using the above information. If the differential between single and double rooms is $12 per night and 35% of the rooms sold are doubles, calculate the single and double room rates.

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The buyer of a piece of real estate is often given the option of buying down the loan. This option gives the buyer a choice of loan terms in which various combinations of interest rates and discount points are offered. The choice of how many points and what rate is optimal is often a matter of how long the buyer intends to keep the property. Darrell Frye is planning to buy an office building at a cost of $984,000. He must pay 10% down and has a choice of financing terms. He can select from a 9% 30-year loan and pay 4 discount points, a 9.25% 30-year loan and pay 3 discount points, or a 9.5% 30-year loan and pay 2 discount points. Darrell expects to hold the building for three years and then sell it. Except for the three rate and discount point combinations, all other costs of purchasing and selling are fixed and identical. (Round your answers to the nearest cent. Use this table, if necessary.) (a) What is the amount being financed? $ (b) If Darrell chooses the 4-point 9% loan,…

Chapter 6 Solutions

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Ch. 6.1 - The following linear programming problem has only...Ch. 6.1 - Use the table method to solve the following linear...Ch. 6.1 - Use the table method to solve the following linear...Ch. 6.1 - Refer to Example 1. Find the basic solution for...Ch. 6.1 - Construct the table of basic solutions and use it...Ch. 6.1 - Construct the table of basic solutions and use it...Ch. 6.1 - Refer to Table 5. For the basic solution...Ch. 6.1 - In Problems 1-8, evaluate the expression. (If...Ch. 6.1 - In Problems 1-8, evaluate the expression. (If...Ch. 6.1 - In Problems 1-8, evaluate the expression. (If...

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Solution Summary: The author explains the mathematical model in the form of a linear programming problem to determine the amount that must be allocated to each type of loan in order to maximize the return of the savings and loan company.

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