Posted by ama on Monday, May 14, 2012 at 9:13am.
Finco must determine how much investment and debtto undertake during the next year. Each dollar invested reduces the NPV of the company by 10¢, and each dollar of debt increases the NPV by 50¢ (due to deductibility of interest payments). Finco can invest at most $1 millionduring the coming year. Debt can be at most 40% of investment. Finco now has $800,000 in cash available. Allinvestment must be paid for from current cash or borrowed money. Set up an LP whose solution will tell Finco how tomaximize its NPV.

Linear Programming  Anonymous, Saturday, January 16, 2016 at 2:31am
max z = .5x1  .1 x2
s.t constraints
x2< = 1000000
x1<= 400000
x1 + x2 = 800,000

Linear Programming  naomi, Monday, January 16, 2017 at 12:41pm
x1 = amount invested
x2= amount borrowed
objective function:
Max = 0.10x1+0,5x2
s.t.:
x1 <= 1,000,000
x1  x2 <= 800,000
x2 <= 0.4x1
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