Question: At time 0, you have $10,000. Investments A and B are available; their cash flows are shown in the table below:
Assume that any money not invested in A or B earns interest at an annual rate of 8%.
Determine how to maximize your cash on hand at time 3. (Use Excel Solver, and show all steps/formulas used in calculating the answer.)
|
Investment
|
Time 0
|
Time 1
|
Time 2
|
Time 3
|
|
A
|
-$1.00
|
$0.20
|
$1.50
|
$0.00
|
|
B
|
$0.00
|
-$1.00
|
$0.00
|
$1.90
|