Funds are available to pay company expenditures in future

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Reference no: EM132089692

The financial manager at D. A. Branch & Sons must ensure that funds are available to pay company expenditures in the future but would also like to maximize investment income. Three short-term investment options are available over the next 6 months: A, a 1-month CD that pays 0.25%, available each month; B, a 3-month CD that pays 1.00%, available at the beginning of the first 4 months; and C, a 6-month CD that pays 2.3%, available in the first month. The net expenditures for the next 6 months are forecast as $50,000, ($12,000), $23,000, ($20,000), $41,000, and ($13,000). Amounts in parentheses indicate a net inflow of cash. The company must maintain a cash balance of at least $10,000 at the end of each month. The company currently has $200,000 in cash. Formulate as LP, setup and solve the problem in Excel. Please clearly specify your decision variables and define them properly.

Reference no: EM132089692

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