2) Property Selection

Once the financing is secured, Corin must decide which properties to invest in. There are 12 options that are under consideration, each of which will have several investors. For each property that she chooses to invest in, Corin must first pay a down payment, and then make an additional investment (above the down payment) in the property. The amount of this additional investment is her choice, but it cannot exceed the maximum amount for that investment. She has a down payment budget of $20 million and an additional investment budget of $75 million.

Option	Down Payment $M	Max Investment $M	Revenue per $
Shopping Center 1	.08	2	.01
Shopping Center 2	1	2	.08
Apartment 1	.4	1	.02
Apartment 2	.5	1.5	.05
Apartment 3	1.2	5	.09
Apartment 4	3	10	.04
Lake Front Development	10	15	.06
McMansion Development	5	12	.03
Office Building 1	.6	4	.04
Office Building 2	2.3	10	.03
Office Building 3	2.5	10	.07
Office Building 4	6	25	.08

The values in the Revenue column represent the annual revenue that will be generated for each dollar invested in a property (above the down payment).

As an example, suppose that Corin invests in Shopping Center 1. She will be required to pay a down payment of $0.8 million, and then she can choose the additional amount to invest (up to the max of $2 million). Suppose she chooses to invest an additional amount of $1 million. Then she will realize annual revenues of $1 * 0.01 = $0.01 million.

There are some additional considerations that Corin must heed:

i) To maintain visibility for her firm, she must invest in at least one of the developments (Lake Front or McMansion).

ii) Insurance regulations require that no more than two apartments can be invested in.

iii) There is also a contractual stipulation requiring, if an investment is made in shopping center two, then there must also be an investment made in office building 2.

iv) Finally, the amount invested in office buildings (above the down payments) cannot exceed $40 million.

If Corins goal is to maximize annual revenue, then what investments should she choose, and how much above the down payment should she invest in them?