Problem

At time 0, we have $10,000. Investments A and B are available; their cash flows are shown...

At time 0, we have $10,000. Investments A and B are available; their cash flows are shown in Table 39. Assume that any money not invested in A or B earns no interest. Formulate an LP that will maximize cash on hand at time 3. Can you guess the optimal solution to this problem?

table 39

Time

A

B

0

−$1

  $0

1

     $0.2

−$1

2

     $1.5

  $0

3

  $0

    $1.0

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Solutions For Problems in Chapter 3.11