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You are advising a client organization to find the best combination of investments in three construction projects denoted by A, B, and C over the
You are advising a client organization to find the best combination of investments in three construction projects denoted by A, B, and C over the next six years. Partial investments (called participation rates) are allowed for each project, between set lower and upper bounds. These bounds are set (as a safety measure) for all three projects as 20% and 80%. Therefore, your role is to find the best project participation rates using optimization. Your client has an initial cash reserve of 12 [million \$] set aside for funding these investments. Please see the table below for additional information. The cash flow needs and yields of the projects at full participation are shown in columns 2 to 4 . The negative numbers are cash flow needs, and the positive numbers indicate cash flow resulting from a completed project, assuming 100% participation for both types of figures. There is an additional (fixed) cash flow stream resulting from other projects, see column 5 . At the end of each year, your client wants to have a minimum cash balance shown by column 6 . The goal of your client is to maximize their final (ending) cash position in Year 6. All financial figures are expressed in [million \$] units. Develop a spreadsheet model to solve this
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