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A trust officer at the Blacksburg National Bank needs to determine how to invest $100,000 in the following collection of bonds to maximize the annual return. Bond Annual Return Maturity Risk Tax Free A 9.5% Long High Yes B 8.0% Short Low Yes C 9.0% Long Low No D 9.0% Long High Yes E 9.0% Short High No The officer wants to invest at least 50% of the money in short-term issues and no more than 50% in high-risk issues. At least 30% of the funds should go in tax-free investments, and at least 40% of the total annual return should be tax free. 1. Formulate the LP model for this problem. 2. Create the spreadsheet model and use Solver to solve the problem.

Operation Management, Management Studies

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