Question
A company has $1,000,000 available for spending on three different development projects. The com- pany has projected that it needs to make 10% on the
A company has $1,000,000 available for spending on three different development projects. The com- pany has projected that it needs to make 10% on the $1,000,000 over the next year to meet its next years budget. The first development project is projected to make 5.5% profit of the money invested in it. The second development project is projected to make 19% profit of the money invested in it. The third development project will not be finished in the next year, so any money invested in it will gener- ate only a 1% return. The companys management decides to invest three times as much in the second project as in the third, because of the potential losses involved in the third project. How much should the company invest in each project to make the 10% return on the $1,000,000?
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