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11. + -/0.05 points TanApMath5 6.3.036 My Notes A financier plans to invest up to $400,000 in two projects. Project A yields a return of 11% on the investment, whereas project B yields a return of 16% on the investment. Because the investment in project B is riskier than the investment in project A, she has decided that the investment in project B should not exceed 35% of the total investment. How much should the financier invest in each project in order to maximize the return on her investment? project A$ project B What is the maximum return?

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Answer #1

let amount invested in project A = $ x

project B = $ y

constraints are

x + y <= 400,000

y <= .35 ( 400000)

objective function is

P = .11x + .16y

Tableau #1 S1 s2 400000 140000 0.11 -0.16 0 Tableau #2 S1 s2 260000 140000 22400 1 0 0.11 0 0.16 1

Tableau #3 S1 s2 260000 140000 51000 1 0 0 0 0.11 0.05 1

project A = $ 260,000

project B = $ 140,000

maximum returen = $ 51000

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