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A Financier Plans to Invest Up to $7 Million in Three

Question 112

Essay

A financier plans to invest up to $7 million in three projects. She estimates that project A will yield a return of 10% on her investment, project B will yield a return of 20% on her investment, and project C will yield a return of 25% on her investment. Because of the risks associated with the investments, she decided to put not more than 20% of her total investment in project C. She also decided that her investments in projects B and C should not exceed 60% of her total investment. Finally, she decided that her investment in project A should be at least 60% of her total investment. How much should the financier invest in each project if she wishes to maximize the total returns on her investments?

Project A: $ __________, project B: $ __________, and project C: $ __________

What is the maximum amount she can expect to make from her investments?

$ __________

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