A family in Hong Kong requires 6 million dollars to finance a new home, and three...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
A family in Hong Kong requires 6 million dollars to finance a new home, and three different banks have agreed to supply all or part of this amount. Although each bank insists that the loan plus interest charges be repaid over 6 years, the repayment schedules differ from bank to bank, as shown in the following table. Bank 1 Bank 2 Bank 3 Percent of principal to be repaid each year Year 2 Year 3 Year 4 Year 5 Year 1 0 5 40 0 15 40 30 25 0 40 35 35 50 40 15 Year 6 55 45 15 The family feels that it is advantageous to borrow in such a manner that the total yearly payments on the loan are as nearly as equal as possible, yet it does not wish to pay more than 4 million dollars in total interest charge. Set up a linear programming model that will determine the amount of money to be borrowed from each bank, such that the family's objectives are realized. A family in Hong Kong requires 6 million dollars to finance a new home, and three different banks have agreed to supply all or part of this amount. Although each bank insists that the loan plus interest charges be repaid over 6 years, the repayment schedules differ from bank to bank, as shown in the following table. Bank 1 Bank 2 Bank 3 Percent of principal to be repaid each year Year 2 Year 3 Year 4 Year 5 Year 1 0 5 40 0 15 40 30 25 0 40 35 35 50 40 15 Year 6 55 45 15 The family feels that it is advantageous to borrow in such a manner that the total yearly payments on the loan are as nearly as equal as possible, yet it does not wish to pay more than 4 million dollars in total interest charge. Set up a linear programming model that will determine the amount of money to be borrowed from each bank, such that the family's objectives are realized.
Expert Answer:
Related Book For
Modern Advanced Accounting In Canada
ISBN: 9781259066481
7th Edition
Authors: Hilton Murray, Herauf Darrell
Posted Date:
Students also viewed these programming questions
-
For each problem, show your work steps. A correct answer with no work shown gets half credit (which means you fail the assignment). An incorrect answer with no work receives 0 credit. With time value...
-
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...
-
Citigroup Inc. (Citi) is a leading global financial services company with over 200 million customer accounts and operations in more than 140 countries. Its operating units Citicorp and Citi Holdings...
-
To load and register a driver, creating a new instance of the Driver class method is better than using the Class.forName() method. (True/False)
-
What is the book value of an asset?
-
(Implementation project) Many techniques have been proposed to further improve the performance of frequent itemset mining algorithms. Taking FP-tree-based frequent pattern growth algorithms (e.g.,...
-
Plaintiff contracted to install a boiler for defendant. After plaintiff had installed and tested the boiler, but before final payment to plaintiff had been made, defendant took custody of the boiler...
-
The general ledger of Red Storm Cleaners at January 1, 2015, includes the following account balances: The following is a summary of the transactions for the year: a. Sales of services, $60,000, of...
-
A group of data items and their mean are given. 270, 315, 365, 370, 390, 510 ; Mean = 370 a. Find the deviation from the mean for each of the data items. b. Find the sum of the deviations in part...
-
A hardware store buys outdoor lights for $2.00 per dozen less 29% 15%. The store's overhead is 45% of cost and the required profit is 22% of cout. For how much per dozen should the best Com The...
-
The marketing research department for a company that manufactures and sells computers established the following price- demand and cost functions. p(x)=2025-68x where p(x) is the wholesale price per...
-
Why do we pay specific taxes and not one or two flat taxes? Where does the tax money go?
-
Mitsubishi Inc. gave the following fringe benefits to Jose for year 2021: Brand new car (cash provided 2,500,000) Residential property (zonal value 8,000,000) Salaries of maid and personal driver...
-
What is the problem with tax havens. Why is it wrong? why is it right? Why do companies engage in tax havens and which companies engage in tax havens?
-
Based on CRA rules, does computer application software (class 12) count as eligible property for the accelerated investment incentive?
-
North American Badgers (Taxidea taxus) occur throughout the western United States and Great Plains of North America, with the geographic range extending east to central Ohio (Messick, 1987; Whitaker...
-
Calculate the number of neutrons of 239Pu.
-
You, the CA, an audit senior at Grey & Co., Chartered Accountants, are in charge of this years audit of Plex Fame Corporation (PFC). PFC is a rapidly expanding, diversified, and publicly owned...
-
On December 31, Year 2, PAT Inc. of Halifax, Nova Scotia, acquired 90% of the voting shares of Gioco Limited of Italy, for 690,000 euros (). On the acquisition date, the fair values equaled the...
-
On January 2, Year 1, Poplar Ltd. purchased 80% of the outstanding shares of Spruce Ltd. for $2,000,000. At that date, Spruce had common shares of $500,000 and retained earnings of $1,250,000 and...
-
The following are summaries of the cash book and bank accounts of J. Duncan who does not keep his books using the double entry system. You are required to: (a) Calculate the value of J. Duncan's...
-
Read the following and answer the questions below. On 31 December 2015 the bank column of C. Tench's cash book showed a debit balance of 1,500. The monthly bank statement written up to 31 December...
-
The bank columns in the cash book for June 2016 and the bank statement for that month for D. Hogan are as follows: You are required to: () Write the cash book up to date to take the above into...
Study smarter with the SolutionInn App