Describe how much investment also debt to undertake

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Q. I have to describe how much investment also debt to undertake during the next yr. Each dollar invested reduces the NPV of my organization by 10 cents also each dollar of debt increases the NPV by 50 cents (due to deductibility of interest payments). I can invest at most $1 million during the coming yr. Debt can be at most 40percent of investment. I now have $800,000.00 in cash available. All investment must be paid for from present cash or borrowed money. Set up an Linear Programming (LP) whose solution will tell me explain how to maximize its NPV. Then graphically solve the LP

Reference no: EM1375361

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