Question
Investor Tamim has $10,000 to invest in four project. The following table gives the cash flow for the four investments. The information in the table
Investor Tamim has $10,000 to invest in four project. The following table gives the cash flow for the four investments. The information in the table can be interpreted as follows: For project 1, $1.00 invested at the start of year 1 will yield $.50 at the start of year 2, $.30 at the start of year 3, $1.80 at the start of year 4, and $1.20 at the start of year 5. The remaining entries can be interpreted similarly. The entry 0.00 indicates that no transaction is taking place. Tamim has the additional option of investing in a bank account that earns 6.5% annually. All funds accumulated at the end of 1 year can be reinvested in the following year in the bank. Formulate the problem as a linear program to determine the optimal allocation of funds to investment opportunities. Solve the model using Solver or AMPL.
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