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Information on a prospective investment for Wells Financial Services is given Loan Funds Available Investment Income (% of previous period's investment) Maximum Investment Payroll
Information on a prospective investment for Wells Financial Services is given Loan Funds Available Investment Income (% of previous period's investment) Maximum Investment Payroll Payment Period 1 2 3 3000 7000 4000 5000 110% 112% 113% 4500 8000 6000 7500 100 120 150 100 In each period, funds available for investment come from two sources: loan funds and income from the previous period's investment. Expenses, or cash outflows, in each period must include repayment of the previous period's loan plus 8.5% interest, and the current payroll payment. In addition, to end the planning horizon, investment income from period 4 (at 110% of the investment) must be sufficient to cover the loan plus interest from period 4. The difference in these two quantities represents net income, and is to be maximized. Formulate a linear Programming model for this financial planning application.
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