EBK MANAGERIAL ECONOMICS
4th Edition
ISBN: 9780100546622
Author: FROEB
Publisher: YUZU
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Chapter 9, Problem 9.6IP
To determine
The differences in the view point of a business person and an economist when viewing a
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A linear programming computer package is needed.
As part of the settlement for a class action lawsuit, Hoxworth Corporation must provide sufficient cash to make the following annual payments (in thousands of dollars).
6
Year
1
23.
4
Payment 160
185 210 255 285
430
The annual payments must be made at the beginning of each year. The judge will approve an amount that, along with earnings on its investment, will cover the annual payments. Investment of the funds will be limited to savings (at 4% annually) and government
securities, at prices and rates currently quoted in The Wall Street Journal.
Hoxworth wants to develop a plan for making the annual payments by investing in the following securities (par value = $1,000). Funds not invested in these securities will be placed in savings.
Security Current Price
1
$1,055
Rate (%)
Years to Maturity
6.750
3
2
$1,000
5.125
Assume that interest is paid annually. The plan will be submitted to the judge and, if approved, Hoxworth will be required to…
Put the sections of Cornell notes in the order of completion.
Chapter 9 Solutions
EBK MANAGERIAL ECONOMICS
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