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Rob s Coffee Ltd . is initiating a retirement benefit scheme for its workforce. The organization plans to commence financing the scheme with a deposit

Robs Coffee Ltd. is initiating a retirement benefit scheme for its workforce. The organization plans to commence financing the scheme with a deposit of $50,000 on January 1,2018. It intends to make an additional investment of $12,000 after one year and continue adding funds (increasing by $2,000 annually) on January 1 of each subsequent year from 2020 through 2032. To secure these disbursements, the corporation aims to procure a variety of bonds. The organization has access to Bond X, Bond Y and Bond Z. Bond X is priced at $970 per unit and will yield a $65 coupon on January 1 every year from 2019 through 2022, along with a final payment of $1,065 on January 1,2023. Bond Y is priced at $980 and will generate a $73 coupon on January 1 annually from 2019 through 2028, with a final payment of $1,073 on January 1,2029. Bond Z is priced at $1,025 and will provide an $85 coupon on January 1 each year from 2019 through 2031, along with a final payment of $1,085 on January 1,2032. The company's cash reserves accrue interest at a rate of 4.5%. Assuming the company desires to purchase bonds on January 1,2018, and is permitted to acquire them in fractional units, what is the optimal amount the company should invest in the various bonds and cash account to finance this scheme until January 1,2032, while minimizing costs?
A. Create a spreadsheet model in Microsoft Excel and solve it using the built in Solver.
B. What is the objective (i.e. minimization or maximization)?
C. What is the optimal number of Bond X, Bond Y and Bond Z to purchase? (Note: the optimal solution will result in objective function value of $246,768.75)

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