6 Problem 4-03 (Algorithmic)The employee credit union at State University is planning the allocation of funds for the coming year. The credit unionmakes four types of loans to its members. In addition, the credit union invests in risk-free securities to stabilize income.The various revenueproducing investments together with annual rates of return are as follows:Type of Loan/Investment Annual Rate of Return (%)Automobile loans8Furniture loans10Other secured loansSignature loansRisk-free securitiesThe credit union will have $1.3 million available for investment during the coming year. State laws and credit unionpolicies impose the following restrictions on the composition of the loans and investments:Automobile Loans $$Other Secured Loans $• Risk-free securities may not exceed 30% of the total funds available for investment.• Signature loans may not exceed 10% of the funds invested in all loans (automobile, furniture, other secured, andsignature loans).• Furniture loans plus other secured loans may not exceed the automobile loans.• Other secured loans plus signature loans may not exceed the funds invested in risk-free securities.How should the $1.3 million be allocated to each of the loan/investment alternatives to maximize total annual return?Round your answers to the nearest dollar.Furniture LoansSignature LoansRisk Free Loans1169129$188800 X630000 X170000 XWhat is the projected total annual return? Round your answer to the nearest dollar.$460000 X140000 X600000 X

Here, the total annual return is to be maximized, First, I will set the LP formulation, and then, I…

Answered: How should the $1.3 million be…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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