Suppose the investments in the Barney-Jones problem sometimes require cash outlays in more than one year. For example, a $1 investment in investment B might require $0.25 to be spent in year 1 and $0.75 to be spent in year 2. Does the current model easily accommodate such investments? Try it with some cash outlay data you can make up, run Solver, and interpret your results.
Answer to relevant QuestionsIn the pension fund problem, you know that if the amount of money allocated initially is less than the amount found by Solver, James will not be able to meet all of the pension fund payments. Use the current model to ...Solve Problem 49 with the extra assumption that the investments can be grouped naturally as follows: 1–4, 5–8, 9–12, 13–16, and 17–20.a. Find the optimal investments when at most one investment from each group can ...In the Great Threads model, the production quantities in row 16 were not constrained to be integers. Presumably, any fractional values could be safely rounded to integers. See whether this is true. Constrain these quantities ...Make up an example, as described in Problem 54, with 20 possible investments. However, do it so that the ratios of NPV to cash requirement are in a very tight range, from 3.0 to 3.2. Then use Solver to find the optimal ...In many cases you can assume that the portfolio return is at least approximately normally distributed. Then you can use Excel’s NORMDIST function as in Chapter 5 to calculate the probability that the portfolio return is ...
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