Question: I NEED HELP WITH ONLY PART D! DO NOT COPY OTHER CHEGG ANSWERS PLEASE As part of the settlement for a class action lawsuit, Hoxworth
I NEED HELP WITH ONLY PART D! DO NOT COPY OTHER CHEGG ANSWERS PLEASE




As part of the settlement for a class action lawsuit, Hoxworth Corporation must provide sufficient cash to make the following annual payments (in thousands of dollars): Year Payment 1 2 3 4 5 6 170 210 250 310 340 500 The annual payments must be made at the beginning of each year. The judge will approve an amount that, along with earnings on its investment, will cover the annual payments. Investment of the funds will be limited to savings (at 3.25% annually) and government securities, at prices and rates currently quoted in The Wall Street Journal. Hoxworth wants to develop a plan for making the annual payments by investing in the following securities (par value = $1000). Funds not invested in these securities will be placed in savings. Security Current Price Rate(%) Years to Maturity 1 $1075 6.55 3 2 $1000 5.125 4 Assume that interest is paid annually. The plan will be submitted to the judge and, if approved, Hoxworth will be required to pay a trustee the amount that will be required to fund the plan. a. Use linear programming to find the minimum cash settlement necessary to fund the annual payments. Let F = total funds required to meet the six years of payments G1 = units of government security 1 G2 = units of government security 2 Si = investment in savings at the beginning of year i Note: All decision variables are expressed in thousands of dollars. If required, round your answers to five decimal places. For subtractive or negative numbers use a minus sign even if there is a + sign before the blank. (Example: -300) Min F s.t. -1 S1 = 170 -1 S2= 210 -1.075 61 + 0.0655 61 + 0.05125 G2 + 0.0655 61 + 0.05125 G2 + 1.0655 G1 + 0.05125 G2 + 1.05125 G2 + -1 S3= 250 -1 G2 + 1.0325 S1+ 1.0325 S2 + 1.0325 53 + 1.0325 S4 + 1.0325 55+ -1 S4= 310 -1 S5/= 340 -1 S6= 500 Round your answer to the nearest dollar. If an amount is zero, enter "0". Round your answer to the nearest dollar. If an amount is zero, enter "O". Current investment required $ 1,555,96 Investment in government security 1 $ 253,229 Investment in government security 2 $ 784,078 Investment in savings for year 1 $ 329,663 Investment in savings for year 2 $ 187,147 Investment in savings for year 3 Investment in savings for year 4 0 Investment in savings for year 5 $ 484,262 Investment in savings for year 6 $ 0 0 b. Use the dual value to determine how much more Hoxworth should be willing to pay now to reduce the payment at the beginning of year 6 to $400,000. Round your answer to the nearest dollar. $ 78,918 c. Use the dual value to determine how much more Hoxworth should be willing to pay to reduce the year 1 payment to $150,000. Round your answer to the nearest dollar. Hoxworth should be willing to pay anything less than $ 20,000 d. Suppose that the annual payments are to be made at the end of each year. Reformulate the model to accommodate this change. Note: All decision variables are expressed in thousands of dollars. If required, round your answers to five decimal places. For subtractive or negative numbers use a minus sign even if there is a + sign before the blank. (Example: -300) Min F s.t. + G2 + -1 S1 1) 2) 1 F G1 + 0.0655 G1 + 0.05125 G2 + S1+ -1 S2 3) S2 + -1 S31= 0.0655 G1 + 0.05125 G2 + 0.05125 G2 + 4) G1+ S3 + -1 S4 5) 1.0513 G2 + S41+ -1 S51= 6) S5+ -1 S6 = 7) S6 + -1 S7 = How much would Hoxworth save if this change could be negotiated? Round your answer to the nearest dollar. $