please help me with question3:
by using this website
http://www.zweigmedia.com/RealWorld/simplex.html
please look at the attach
3.
Cardinal Capital is a company that makes relatively high risk/high
return investments in promising small businesses across multiple
markets. The company is in the process of developing a strategy/policy
for its 2017 investment portfolio, which will have a maximum of $15
Million with which to work. The table below provides data gathered from
analysis of historical investments and future projections.
Type of Business Median Rate of Return Loss Rate
Software 20% 14%
Restaurant/Food Production 7% 5%
Retail 5% 4%
Manufacturing 10% 6%
Tourism 15% 9%
The
median rate of return is what the company has decided to use as a tool
to inform decisions about the type of businesses in which to invest.
The loss rate represents the historical likelihood that the company will
lose all or part of its investment. For calculation purposes it is
assumed that the entire investment is lost.
To meet its competition, business, and community goals, Cardinal has several entering goals:
-Retail and Restaurant/Food Production must be at least 40% of the dollar value of all investments
-Software must be no more than 30% of the dollar value of all investments
-Manufacturing must be at least 10% of the dollar value of all investments
Please
provide the investment strategy that maximizes projected profit and
meets the above constraints (it is strongly recommended that you show
your work). Additionally please indicate what other questions may be
asked by Cardinal to further refine its strategy.
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