Question: Problem 3 1 : Dan Boyd is a financial planner trying to determine how to invest $ 1 0 0 , 0 0 0 for
Problem : 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:
For example, if Dan invests $ in investment A 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 B 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.
b Create a spreadsheet model for this problem and solve it using Solver.
c What is the optimal solution?
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