Tuesday
March 31, 2015

Homework Help: Linear Programming

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.

Answer this Question

First Name:
School Subject:
Answer:

Related Questions

Accounting please help in homework - Question No: 1 Mr. A, as a financial ...
Finance - You are evaluating a proposed expansion of an existing subsidiary ...
linear programming - Globex Investment Capital Corporation owns six companies ...
Math - Indigo Industrial, Inc. is trying to determine which, if any, of five ...
Finance - Capital Budgeting Problems I. Indigo Industrial, Inc. is trying to ...
Finance - Innovation Company is thinking about marketing a new software product...
Finance Homework - You are told by the finance section that a particular ...
Corporate Finance - A project cost $1 million and has a base-case NPV of exactly...
finance - Innovation Company is thinking about marketing a new software product...
business math - I need help with my economics with calculating the NPV of the ...

Members