27. A lending fi rm is considering 6 independent and divisible investment alternatives which, at any time the fi rm chooses, can be exited with a full refund of the initial investment. A total of $200,000 is available for investment, and the MARR is 10% (Note! There is no planning horizon specifi ed, so the fi rm can choose any number of years they wish—the optimum portfolio and the IRR will remain the same since the initial investment and the salvage value are the same, and the annual returns are constant each year.):

a. Determine the optimum portfolio, including which investments are fully or partially (if partial, give percentage) selected. You may use Excel®;
do not use SOLVER.

b. Determine the optimum portfolio and its PW, specifying which investments are fully or partially (give percentage) selected using (1) the current limit on investment capital, (2) plus 20%, and (3) minus 20%. Use Excel®
and SOLVER.

c. Determine the optimum portfolio and its PW, specifying which investments are fully or partially (give percentage) selected using (1) the current MARR, (2) plus 20%, and (3) minus 20%. Use Excel® and SOLVER.

d. Determine the optimum investment portfolio and its PW when investments 1 through 3 are indivisible and investments 4 through 6 are divisible. Use Excel® and SOLVER.

e. Determine the optimum investment portfolio when all of the investments are divisible, but fractional investments are limited to 0%, 25%, 50%, 75%, or 100%. Use Excel® and SOLVER.

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Investment Initial Investment Annual Return 1 $25,000 $2,600 23 $35,000 $3,750 $30,000 $3,050 4 $40,000 $4,775 56 $60,000 $6,750 $50,000 $5,850