Business, 06.06.2020 22:02 1andonlyrob

Problem 4-03 (Algorithmic) The employee credit union at State University is planning the allocation of funds for the coming year. The credit union makes four types of loans to its members. In addition, the credit union invests in risk-free securities to stabilize income. The various revenueproducing investments together with annual rates of return are as follows: Type of Loan/Investment Annual Rate of Return (%) Automobile loans 8 Furniture loans 10 Other secured loans 11 Signature loans 12 Risk-free securities 9 The credit union will have $1.7 million available for investment during the coming year. State laws and credit union policies impose the following restrictions on the composition of the loans and investments: Risk-free securities may not exceed 30% of the total funds available for investment. Signature loans may not exceed 10% of the funds invested in all loans (automobile, furniture, other secured, and signature loans). Furniture loans plus other secured loans may not exceed the automobile loans. Other secured loans plus signature loans may not exceed the funds invested in risk-free securities. How should the $1.7 million be allocated to each of the loan/investment alternatives to maximize total annual return? Round your answers to the nearest dollar. Automobile Loans $ Furniture Loans $ Other Secured Loans $ Signature Loans $ Risk Free Loans $ What is the projected total annual return? Round your answer to the nearest dollar. $

Answers: 3

Show answers

Answers

auto: $535,500furniture: $144,500other secured: $391,000signature: $119,000risk-free: $510,000projected return: $160,480 (9.44%)

Explanation:

We can let the variables a, f, o, s, r stand for the amounts invested in auto loans, furniture loans, other secured loans, signature loans, and risk-free securities, respectively. The restrictions imposed are ...

r ≤ 0.30(1.7·10^6)s ≤ 0.10(a +f +o +s)f +o ≤ ao +s ≤ ra +f +o +s +r = 1.7·10^6

And the objective is to maximize ...

p = 0.08a +0.10f +0.11o +0.12s +0.09r

We can write the constraints in standard form as ...

r -510000 ≤ 0-a -f -o +9s ≤ 0-a +f +o ≤ 0o +s -r ≤ 0a +f +o +s +r -1700000 = 0

It is convenient to formulate this problem as a "solver" problem in a spreadsheet program. The spreadsheet and the solver setup are shown in the attachments. The result is ...

Automobile Loans $535,500Furniture Loans $144,500Other Secured Loans $391,000Signature Loans $119,000Risk Free Securities $510,000

The projected total annual return: $160,480 (9.44%)

_____

Comment on the attachments

The first attachment shows the NeoOffice spreadsheet used to solve this problem. The formula shown is filled in all cells G3:G8. The second attachment shows the Solver setup used to solve this problem. There are actually five constraints. The one not showing is $G$7 = 0.

Problem 4-03 (Algorithmic) The employee credit union at State University is planning the allocation

Answer from: Quest

what

explanation:

Answer from: Quest

The business cycle is the periodic but irregular up-and-down movement in economic activity, measured by fluctuations in real gross domestic product (gdp) and other macroeconomic variables. a business cycle is typically characterized by four phases—recession, recovery, growth, and decline—that repeat themselves over time. economists note, however, that complete business cycles vary in length. the duration of business cycles can be anywhere from about two to twelve years, with most cycles averaging six years in length. some business analysts use the business cycle model and terminology to study and explain fluctuations in business inventory and other individual elements of corporate operations. but the term "business cycle" is still primarily associated with larger (industry-wide, regional, national, or even international) business trends.

Another question on Business

Business, 22.06.2019 01:30

Consider the following limit order book for a share of stock. the last trade in the stock occurred at a price of $50. limit buy orders limit sell orders price shares price shares $49.75 500 $49.80 100 49.70 900 49.85 100 49.65 700 49.90 300 49.60 400 49.95 100 48.65 600 a. if a market buy order for 100 shares comes in, at what price will it be filled? (round your answer to 2 decimal places.) b. at what price would the next market buy order be filled? (round your answer to 2 decimal places.) c. if you were a security dealer, would you want to increase or decrease your inventory of this stock? increase decrease

Answers: 2

Answer

Business, 22.06.2019 09:40

Microsoft's stock price peaked at 6118% of its ipo price more than 13 years after the ipo suppose that $10,000 invested in microsoft at its ipo price had been worth $600,000 (6000% of the ipo price) after exactly 13 years. what interest rate, compounded annually, does this represent? (round your answer to two decimal places.)

Answers: 1

Answer

Business, 22.06.2019 09:40

The wall street journal reported that walmart stores inc. is planning to lay off 2,300 employees at its sam's club warehouse unit. approximately half of the layoffs will be hourly employees (the wall street journal, january 25-26, 2014). suppose the following data represent the percentage of hourly employees laid off for 15 sam's club stores. 55 56 44 43 44 56 60 62 57 45 36 38 50 69 65 (a) compute the mean and median percentage of hourly employees being laid off at these stores. (b) compute the first and third quartiles. (c) compute the range and interquartile range. (d) compute the variance and standard deviation. (e) do the data contain any outliers? (f) based on the sample data, does it appear that walmart is meeting its goal for reducing the number of hourly employees?

Answers: 1

Answer

Business, 22.06.2019 14:10

Carey company is borrowing $225,000 for one year at 9.5 percent from second intrastate bank. the bank requires a 15 percent compensating balance. the principal refers to funds the firm can effectively utilize (amount borrowed − compensating balance). a. what is the effective rate of interest? (use a 360-day year. input your answer as a percent rounded to 2 decimal places.) b. what would the effective rate be if carey were required to make 12 equal monthly payments to retire the loan?

Answers: 1

Answer

You know the right answer?

Problem 4-03 (Algorithmic) The employee credit union at State University is planning the allocation...

Questions