Your Name: Econ 2326 Spring 2023 Operations Research Midterm Exam Subhash Ray Maximum Points: 60 Note: For answers on Excel Spreadsheets, send only one Excel file with multiple spreadsheets for different parts of this test. In the file name and in each sheet, include your name and the question number to which the answer applies. Distribution of Point: Question 1: 35 points Question 2-6: 25 points (5 points each) 1. A company was ordered by the court in settlement of a class action suit to make a total payment of $1, 000,000 as per the following schedule: Beginning of |Amount ($) Year 2 195,000 Year 3 215,000 Year 4 240,000 Year 5 350,000 The company has to set up a trust fund and put sufficient amount of money into it at the beginning of year 1 so that the payments can be made on schedule. The fund managers can invest any surplus funds lying with them in short term bonds so that the interest earned along with the principal can be utilized to make the payments as required. There are three available bonds of different years to maturity: A (1-year), B (2-year), and C (3-year). The returns on maturity on the different bonds are: 4% on A, 10% on B, and 18% on C. Because the final payment is made at the beginning of year 5, effectively the investment options available in different years are: Beginning of Bonds available Year 1 A, B, C Year 2 A, B, C Year 3 A, B Year 4 A The company wishes to find an investment strategy that will allow the fund to make the necessary payments from the minimum amount of money needed for the fund. (a) Set up this multi-period cash flow problem algebraically. (15 points) (b) Use Excel Solver to solve the problem and e-mail your answer to subhash.ray@uconn.edu. (15 points) (c) What is the minimum initial endowment needed for the fund? (5 points)Multiple Choice: (25 points) 2. If the total supply is less than the total demand in a transportation problem, a. total shipment is = demand at every demand node b. total shipment is = supply at every supply node but total quantity received is >= demand at every demand node c. total shipment is =0 Microsoft Excel 16.0 Answer Report Objective Cell (Max) Cell Name Original Value Final Value SE$3 173571.4286 173571.4286 Variable Cells Cell Name Original Value Final Value Integer SB$2 X1 171.4285714 171.4285714 Contin $C$2 X2 0 Contin $D$2 X3 257.1428571 257.1428571 Contin Constraints Cell Name Cell Value Formula Status Slack $E$4 1200 $E$4