Formulate but do not solve the following exercise as a linear programming problem. A financier plans to invest up to $600,000 in two projects. Project A yields a return of 10% on the investment of x dollars, whereas Project B yields a return of 14% on the investment of y dollars. Because the investment in Project B is riskier than the investment in Project A, the financier has decided that the investment in Project B should not exceed 40% of the total investment. How much should she invest in each project to maximize the return on her investment P in dollars, and what amount is available for investment?
Jaxon Hamilton
Answered question
2022-07-24
Formulate but do not solve the following exercise as a linear programming problem. A financier plans to invest up to $600,000 in two projects. Project A yields a return of 10% on the investment of x dollars, whereas Project B yields a return of 14% on the investment of y dollars. Because the investment in Project B is riskier than the investment in Project A, the financier has decided that the investment in Project B should not exceed 40% of the total investment. How much should she invest in each project to maximize the return on her investment P in dollars, and what amount is available for investment?
Answer & Explanation
abortargy
Beginner2022-07-25Added 19 answers
Step 1 Given, Project A yields a return of 10% on the investment of x dollars, whereas Project B yields a return of 14% on the investment of y dollars. Then, the total return from two investments is
Let the total return be Them we have,
Since financier plans to invest up to $600,000 in two projects, then we have,
Here, the total investment is Since the investment in Project B should not exceed of the total investment, then we have,