The employee credit union at State University is planning the allocation of funds for the coming...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The employee credit union at State University is planning the allocation of funds for the coming year. The credit union makes four types of loans to its members. In addition, the credit union invests in risk-free securities to stabilize income. The various revenue-producing Investments, together with annual rates of return, are as follows. Type of Loan/Investment Annual Rate of Return (%) Automobile loans 7 Furniture loans 9 Other secured loans 10. Signature loans 11 Risk-free securities 8 The credit union will have $2,200,000 available for investment during the coming year. State laws and credit union policies impose the following restrictions on the composition of the loans and investments. Risk-free securities may not exceed 30% of the total funds available for investment. Signature loans may not exceed 10% of the funds invested in all loans (automobile, furniture, other secured, and signature loans). Furniture loans plus other secured loans may not exceed the automobile loans. Other secured loans plus signature loans may not exceed the funds invested in risk-free securities. How should the $2,200,000 be allocated to each of the loan/investment alternatives (in dollars) to maximize total annual return? Automobile loans $ Furniture loans $ Other secured loans $ Signature loans $ The employee credit union at State University is planning the allocation of funds for the coming year. The credit union makes four types of loans to its members. In addition, the credit union invests in risk-free securities to stabilize income. The various revenue-producing Investments, together with annual rates of return, are as follows. Type of Loan/Investment Annual Rate of Return (%) Automobile loans 7 Furniture loans 9 Other secured loans 10. Signature loans 11 Risk-free securities 8 The credit union will have $2,200,000 available for investment during the coming year. State laws and credit union policies impose the following restrictions on the composition of the loans and investments. Risk-free securities may not exceed 30% of the total funds available for investment. Signature loans may not exceed 10% of the funds invested in all loans (automobile, furniture, other secured, and signature loans). Furniture loans plus other secured loans may not exceed the automobile loans. Other secured loans plus signature loans may not exceed the funds invested in risk-free securities. How should the $2,200,000 be allocated to each of the loan/investment alternatives (in dollars) to maximize total annual return? Automobile loans $ Furniture loans $ Other secured loans $ Signature loans $
Expert Answer:
Related Book For
Quantitative Methods for Business
ISBN: 978-0324651751
11th Edition
Authors: David Anderson, Dennis Sweeney, Thomas Williams, Jeffrey cam
Posted Date:
Students also viewed these finance questions
-
The employee credit union at State University is planning the allocation of funds for the coming year. The credit union makes four types of loans to its members. In addition, the credit union invests...
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
Chiz enterprise reports its gross sales/receipts during the quarter as follows: Sale of computers Gross receipts - computer repairs Sales returns and allowances Sales discounts for early payments...
-
Continue with the facts of Question 10. Another large shipment was made in May to a customer in South Dakota, a state that does not impose any corporate income tax. Is this sale to be included in...
-
In todays economy, everyone has become savings savvy. It is still believed, though, that a higher percentage of women than men clip coupons. A random survey of 180 female shoppers indicated that 132...
-
Determine the longest length of a W10 \(\times 12\) structural A992 steel section if it is fixed supported and is subjected to an axial load of \(28 \mathrm{kip}\). Use the AISC equations.
-
Information pertaining to Hedlund Corporation's property, plant, and equipment for 2011 follows. The salvage value s of the depreciable assets are immaterial. Depreciation is computed to the nearest...
-
Let 5 4 1 M = -1 2 Enter the matrix formed by performing the row operation 4R + R2 R2 on M. The new matrix is
-
A cloud is observed to commence formation at a temperature of-61 C and continues to cool due to emission of infrared radiation. a) Determine the partial pressure (Pa) and density of water vapour...
-
The idea of a Universal Basic Income Guarantee (UBI) has become increasingly popular, and has generated a surprising amount of interest across the political spectrum. Under such a scheme, every...
-
From 1962 to 1964, federal spending on nondefense-related education and training rose from $1.31 billion to $1.61 billion, while from 2012 to 2014, it rose from $96.9 billion to $99.5 billion. Given...
-
You are trying to decide where to go on vacation. In country A, your risk of death is 1 in 20,000, and youd pay $5,000 to go on that vacation. In country B, your risk of death is 1 in 30,000, and...
-
One approach to calculating the value of life involves the use of compensating differential studies. What informational problems make these studies difficult to carry out? The icon indicates a...
-
A(n) ______________ is a list of questions that encourage the writer to think about audience, purpose, key issues, and delivery.
-
b. GAO standards. c. OMB standards. c. Eighty hours every two years. d. The auditor should express an opinion on the fair presentation of the Schedule in relation to the basic financial statements...
-
Refrigerant R-12 at 30C, 0.75 MPa enters a steady flow device and exits at 30C, 100 kPa. Assume the process is isothermal and reversible. Find the change in availability of the refrigerant.
-
A study examined waiting times in the X-ray department for a hospital in Jacksonville, Florida. A clerk recorded the number of patients waiting for service at 9:00 A.M. on 20 consecutive days and...
-
Hatcher Enterprises uses a chemical called Rbase in production operations at five divisions. Only six suppliers of Rbase meet Hatchers quality control standards. All six suppliers can produce Rbase...
-
Georgia Cabinets manufactures kitchen cabinets that are sold to local dealers throughout the Southeast. Because of a large backlog of orders for oak and cherry cabinets, the company decided to...
-
True or false? Explain: hierarchy reduces complexity because A. It reduces the size of individual modules. B. It cuts down on the number of interconnections between elements. C. It assembles a number...
-
True or false? Explain: modularity reduces complexity because A. It reduces the effect of incommensurate scaling. B. It helps control propagation of effects.
-
Consider the part of the file system naming hierarchy illustrated in the following: a. In the path name and in the figure, identify the context that you should use for that resolution and the context...
Study smarter with the SolutionInn App