TABLE 8. Combinations of Plans A and B with Total
Investment of $600,000 (multiply all values in table by 1000)
Individual
investment, $
Plan A Plan B Annual dividend, $
600 O 95 + 0= 95
500 100 89+10= 99
400 200 80 + 32 = 112
300 300 63 + 60 = 123
200 400 44 + 91=135
100 500 25+93 = 118
O 600 0 + 94= 94The possible combinations of plans A and B corresponding to a total investment of
$600,000 are shown in Table 8, and their corresponding annual dividends are computed
by applying the values given in Table 7. The most profitable combination for the stipulat-
ed total investment is one in which $200,000 is placed in plan A and $400,000 is placed in
plan B. The corresponding annual dividend is $135,000.
- Identify the most profitable combination of plans A and B
and determine the corresponding annual dividend if any amount
is placed in this combination
The amount that can be placed in this combination is a multiple of $100,000 with an up-
per limit of $600,000. Repeat the procedure in step 1 to obtain the results shown in Table - The nations listed in this table are candidates for the most profitable combination of all
three plans, and the other combinations of A and B are now discarded. - Compute the maximum dividend that can be obtained
from a combination of all three plans
The calculations are shown in Table 10. As an illustration, assume that $400,000 will be
placed in the A-B combination, leaving $600,000 - $400,000 = $200,000 for plan C.
From Table 9, the annual dividend from the A-B combination is $91,000; from Table 7,
TABLE 9. Optimal Combinations of Plans A and B (multiply all
values in table by 1000)
Individual investment, $
Total
investment, $ Plan A Plan B Annual dividend, $
600 200 400 44 + 91 = 135
500 100 400 25 + 91=116
400 O 400 0 + 91= 91
300 300 O 63 + 0= 63
200 200 O 44 + 0= 44
100 100 O 25 + 0= 25