Question
A company has $50 million available for investment over the next five months. The objective of the company is to maximize the total interest earned
A company has $50 million available for investment over the next five months. The objective of the company is to maximize the total interest earned over the five-month period as well as have at least $20 million available at the start of the sixth month for a new project. For the time being, Winslow wishes to invest only in 2-month government bonds (earning 4% over the 2-month period); 3-month treasury bills (earning 6% over the 3-month period); and 4-month construction loans (earning 6% over the 4-month period). These investments are available each month for investment. Any remaining Funds not invested in these three investments are liquid (cash) kept in a bank and will earn 1% per month when invested locally. The company requires no more than $20 million to be invested in government bonds at any time. Formulate a linear program that will help the company determine how to invest over the next five months.
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