on must provide suf- 7. As part of the settlement for a class action lawsuit, Hoxworth Corporation must ficient cash to make the following annual payments (in thousands of dollars): 6 Year 1 2 Payment | 190 215 3 240 4 285 5 315 460 judge will approve an The annual payments must be made at the beginning of each year. The judge will apr amount that, along with earnings on its investment, will cover the annual payments. I. ment of the funds will be limited to savings (at 4% annually) and government securities prices and rates currently quoted in The Wall Street Journal. Hoxworth wants to develop a plan for making the annual payments by investing in the following securities (par value = $1000). Funds not invested in these securities will be placed in savings. Security Years to Maturity Current Price $1055 $1000 Rate (%) 6.750 5.125 Assume that interest is paid annually. The plan will be submitted to the judge and, if approved, Hoxworth will be required to pay a trustee the amount that will be required to fund the plan. a. Use linear programming to find the minimum cash settlement necessary to fund the annual payments. b. Use the dual value to determine how much more Hoxworth should be willing to pay now to reduce the payment at the beginning of year 6 to $400,000. c. Use the dual value to determine how much more Hoxworth should be willing to pay reduce the year 1 payment to $150,000. d. Suppose that the annual payments are to be made at the end of each year. Refom the model to accommodate this change. How much would Hoxworth save if the could be negotiated