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3. A financial planner trying to determine how to invest 1 million dollars for one of his clients. The cash flows for the five investments
3. A financial planner trying to determine how to invest 1 million dollars for one of his clients. The cash flows for the five investments under consideration are summarized in the following table: Summary of cash in-flows and out-flows (at the beginning for year) Year A B C D E -1 0 -1 0.4 OO 0 +1.02 -1 +1.3 0 +1.4 +1.6 +1.2 0 For example, if the financial planner invests $1 in investment A at the beginning of year 1, he will receive $0.4 at the beginning of year 2 and another $1.02 at the beginning of year 3. Alternatively, he can invest $1 in investment B at the beginning of year 2 and receive $1.4 at the beginning of year 4. Entries of "0" in the table (above) indicate times when on cash inflows or out-flows can occur. The minimum required investment for each of the possible investments is $50,000. Also, at the beginning of each year, the financial planner may also place any or all of the available money in a money market account that is expected to yield 3% per year. How should the financial planner invest if he wants to maximize the amount of money available to his client at the end of year 4
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