Question
At the beginning of a year, a company earns revenues and pays bills: In the beginning of year 1, the company earns $800,000 in revenue
At the beginning of a year, a company earns revenues and pays bills: In the beginning of year 1, the company earns $800,000 in revenue and pays $400,000 in bills. In the beginning of year 2, the company earns $700,000 in revenue and pays $500,000 in bills. In the beginning of year 3, the company earns $350,000 in revenue and pays $600,000 in bills. In the beginning of year 4, the company earns $400,000 in revenue and pays $250,000 in bills. In the beginning of year 5, the company earns $600,000 in revenue and pays $300,000 in bills. Due to a historic recession, interest rates have fallen. Any money left over may be invested for 1 year at an interest rate of 1% or for two years at an interest rate of 3%. For example, x dollars invested at the beginning of year 2 becomes 1.01x dollars at the beginning of year 3 and 1.03x dollars at the beginning of year 4. Formulate a linear program that determines an investment strategy that maximizes cash on hand at the beginning of year 6.
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