Two investments with varying cash flows (in thousands of dollars) are available, as shown in Table 8 At time 0, $ 10.000 is available for investment, and at time 1, $7.000 is available. Assuming that r = 0.10, set up an LP whose solution maximizes the NPV obtained from these investments Graphically find the optimal solution to the LP.
TABLE 8
| Cash flow (in $ Thousands) at Time | |||
Investment | 0 | 1 | 2 | 3 |
1 | −6 | −5 | 7 | 9 |
2 | −8 | −3 | 9 | 7 |
(Assume that any fraction of an investment may be purchased.)
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