A lending firm is considering 6 independent and divisible investment alternatives which, at any time the firm chooses, can be exited
with a full refund of the initial investment. A total of $200,000 is available for investment, and the MARR is 10%. For parts b-e of the
question please use investment period equal to 5 years.
Alternative
1
2
3
4
5
6
Initial Investment $25,000 $35,000 $30,000 $40,000 $60,000 $50,000
Annual Return
$2,600 $3,750 $3,050 $4,775 $6,750 $5,850
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Part a
Your answer is incorrect.
Determine the optimum portfolio, including which investments are fully or partially selected (give percentages). If you are not
including an investment, show its percentage as zero. You may use Excel®; do not use SOLVER.
Investments to be included Percentage of investment included
Alternative 1
10.4 %
Alternative 2
11.71 %
Alternative 3
10.17 %
Alternative 4
11.94 %
Alternative 5
11.25 %
Alternative 6
11.70 %