Question: A linear programming computer package is needed. The employee credit union at State University is planning the allocation of funds for the coming year. The

A linear programming computer package is needed.
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.
\table[[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]]
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 $2,600,000 be allocated to each of the loan/investment alternatives to maximize total annual return?
Automobile loans
Furniture loans
Other secured loans
Signature loans
What is the projected total annual return?
Need Help?
 A linear programming computer package is needed. The employee credit union

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!