Question: Dan Boyd is a financial planner trying to determine how to invest $ 1 3 0 , 0 0 0 for one of his clients.
Dan Boyd is a financial planner trying to determine how to invest $ for one of his clients. The cash flows for the five investments under consideration are summarized in the following table: Summary of Cash InFlows and OutFlows at Beginning of YearYear Year Year Year For example, if Dan invests $ in investment at the beginning of year he will receive $ at the beginning of year and another $ at the beginning of year Alternatively, he can invest $ in investment at the beginning of year and receive $ at the beginning of year Entries of in the preceding table indicate times when no cash inflows or outflows can occur. The minimum required investment for each of the possible investments is $ Also, at the beginning of each year, Dan may also place any or all of the available money in a money market account that is expected to yield per year. How should Dan plan his investments if he wants to maximize the amount of money available to his client at the end of year a Formulate an ILP model for this problem to maximize the amount of money in dollars available at the end of year Let Xi be the amount to invest, in dollars, in investment i Let Mj be the amount to invest, in dollars, in the money market in year j for j Let Yi if Xi and otherwise. Enter your answers for your "minimum required investments" and linking constraints as commaseparated lists of inequalities andor equations. In your linking constraints, use for each big M value. MAX: Subject to:total invested in year total available at end of year total available at end of year minimum required investments linking constraints Xi Mj and integer Yi binary b Create a spreadsheet model for this problem and solve it using Solver. What is the optimal solution? X X X X X M M M
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