A business student has $2500 available from a summer job and has identified three potential stocks in which to invest. To find an optimal solution to maximize the Excel add-in Solver was used. The accompanying figure shows the Solver Sensitivity Report. Using only the information in the Sensitivity Report, complete parts a through c. Click the icon to view the Solver Sensitivity Report. a. How much would the return on stock B have to increase in order for the optimal solution to invest full in that stock? It would need to increase by at least $per share, which is the of the (Type an integer or a decimal. Do not round.) b. How much would the return on stock C have to increase in order to fully invest in that stock? It would need to increase by at least $ per share, which is the of the (Type an integer or a decimal. Do not round.) c. Explain the value of the shadow price for the total investment constraint. If the student could borrow $1,000 at 9% a year to increase her total investment, what would you recommend and why? profit by $ So, an additional $1,000 would Since the shadow price is $0.78, every additional dollar invested will result in a gain of $profit at a cost of $ in interest. (Type integers or decimals rounded to two decimal places as needed.) 0 Solver Sensitivity Report . X D E F G H A B 6 Variable Cells 7 8 Cell Name 9 $B$5 Shares Purchased A 10 $C$5 Shares Purchased B 11 $D$5 Shares Purchased C 12 13 Constraints 14 15 Cell Name 16 $A$16 Capacity Used Final Value 214.1111111 0 0 Reduced Cost 0 -2 -8 Objective Coefficient 9 Allowable Increase 1E +30 3 8 Allowable Decrease 2.6 1E +30 1E + 30 8 11 Final Shadow Value Price 2500 0.777777778 Constraint R.H. Side 2500 Allowable Increase 1E +30 Allowable Decrease 2500 A business student has $2500 available from a summer job and has identified three potential stocks in which to invest. To find an optimal solution to maximize the Excel add-in Solver was used. The accompanying figure shows the Solver Sensitivity Report. Using only the information in the Sensitivity Report, complete parts a through c. Click the icon to view the Solver Sensitivity Report. a. How much would the return on stock B have to increase in order for the optimal solution to invest full in that stock? It would need to increase by at least $per share, which is the of the (Type an integer or a decimal. Do not round.) b. How much would the return on stock C have to increase in order to fully invest in that stock? It would need to increase by at least $ per share, which is the of the (Type an integer or a decimal. Do not round.) c. Explain the value of the shadow price for the total investment constraint. If the student could borrow $1,000 at 9% a year to increase her total investment, what would you recommend and why? profit by $ So, an additional $1,000 would Since the shadow price is $0.78, every additional dollar invested will result in a gain of $profit at a cost of $ in interest. (Type integers or decimals rounded to two decimal places as needed.) 0 Solver Sensitivity Report . X D E F G H A B 6 Variable Cells 7 8 Cell Name 9 $B$5 Shares Purchased A 10 $C$5 Shares Purchased B 11 $D$5 Shares Purchased C 12 13 Constraints 14 15 Cell Name 16 $A$16 Capacity Used Final Value 214.1111111 0 0 Reduced Cost 0 -2 -8 Objective Coefficient 9 Allowable Increase 1E +30 3 8 Allowable Decrease 2.6 1E +30 1E + 30 8 11 Final Shadow Value Price 2500 0.777777778 Constraint R.H. Side 2500 Allowable Increase 1E +30 Allowable Decrease 2500
