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3. (25 points) Investor Sandy Smith has $10,000 to invest in four projects. The following table gives the cash flow for the four investments: PROJECT

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3. (25 points) Investor Sandy Smith has $10,000 to invest in four projects. The following table gives the cash flow for the four investments: PROJECT Cash Flow ($1000) at the start of YEAR 1.00 YEAR 2 0.50 0.60 1.00 0.40 YEAR 3 0.30 0.20 0.80 0.60 YEAR 4 1.80 1.50 1.90 1.80 YEAR 1.20 1.30 0.80 0.95 3 4 The information in the table can be interpreted as follows: For project 1, $1.00 invested at the start of year 1 will yield $0.50 at the start of year 2, S0.30 at the start of year 3, $1.80 at the start of year 4, and $1.20 at the start of year 5. The other rows may be interpreted in a similar manner. The entry 0.00 indicates that no transaction is taking place. Smith has the additional option of investing in a bank account that earns 6.5% annually. All Funds accumulated at the end of 1 year can be reinvested in the following year. Formulate the problem as a linear program to determine the best allocation of funds. Make sure you define all the decision variables. 0.00

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