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25 5 points New Exercise Bank Content Qu. 06-19 Al Ferris has $60.000 that he wishes to invest now in order to use the
25 5 points New Exercise Bank Content Qu. 06-19 Al Ferris has $60.000 that he wishes to invest now in order to use the accumulation for purchasing a retirement annuity in five years. After consulting with his financial advisor, he has been offered four types of fixed-income investments, which we will label as Investments A, B, C, and D. Investments A and B are available at the beginning of each of the next five years (call them years 1 to 5). Each dollar invested in A at the beginning of a year returns $1.40 (a profit of $0.40) two years later (in time for immediate reinvestment). Each dollar invested in B at the beginning of a year returns $1.70 three years later. Investments C and D will each be available at one time in the future. Each dollar invested in C at the beginning of year 2 returns $1.90 at the end of year 5. Each dollar Invested in D at the beginning of year 5 returns $1.30 at the end of year 5. eBook Click here for the Excel Data File Formulate and solve a linear programming model for this problem on a spreadsheet. a. Which investment plan maximizes the amount of money that can be accumulated by the beginning of year 6? Note: Leave no cells blank. Enter "O" wherever required. Investment A Year 1 Year 2 Year 3 Year 4 Year 1 Investment B Year 2 Investment C Investment D Year 3 Year 2 Year 5 Dollars Invested b. Determine the ending balance at Year 5. Ending balance
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