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Natsano has at most $50,000 to invest in the common stocks of two co.pdf
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Natsano has at most $50,000 to invest in the common stocks of two co.pdf

  1. Natsano has at most $50,000 to invest in the common stocks of two companies. He estimates that an investment in company A will yield a return of 10%, whereas an investment in company B which he feels is risker will yield 20%. If he decides that his investment in the stock of company A is to exceed his investment in the stock of company B by at least $20,000, determine how much he should invest in the stock of each company in order to maximize the return on his investment. Solution let x=a let y =b Maximize z=.1x+.2y subject to x,y>+0 x+y<=50000 x-y>=20000 graph the system,find the corner points (20000,0) (50000,0) (35000,15000) he should invest 35000 in A he should invest 15000 in B to maximize his profit at $6500
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