An investor has money-making activities A1, A2, A3, and A4, He has only one million naira to
Question:
An investor has money-making activities A1, A2, A3, and A4, He has only one million naira to invest. In order to avoid excessive investment, no more than 50% of the total investment can be placed in activity A2 and/or activity A3. Activity A1 is very conservative, while activity A4 is speculative. To avoid excessive speculation, at least one hundred thousand naira must be invested in activity A1 for every three hundred thousand naira invested in activity A4. The data on the return on investment is as follows:
Activity | Anticipated return on investment (%) |
A1 | 10 |
A2 | 12 |
A3 | 14 |
A4 | 16 |
The investor wishes to know how much to invest in each in order activity to maximize the total return on the investment. Formulate the problem as a linear programming model.
Financial Accounting for Decision Makers
ISBN: 978-0273763451
6th Edition
Authors: Peter Atrill, Eddie McLaney