2 Condo Construction Company is going to First National Bank for a loan. At the present time,...
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2 Condo Construction Company is going to First National Bank for a loan. At the present time, the bank is willing to lend Condo up to $1 million, with interest costs of 10%. Condo believes that the amount of borrowed funds needed during the current year is normally distributed, with a mean of $700,000 and a standard deviation of $300,000. If Condo needs to borrow more money during the year, the company will have to go to Louie the Loan Shark. The cost per dollar borrowed from Louie is 25¢. To minimize expected interest costs for the year, how much money should Condo borrow from the bank?
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Related Book For
Operations Research Applications And Algorithms
ISBN: 9780534380588
4th Edition
Authors: Wayne L. Winston
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