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  • Larry Fredendall's Sinking Fund: A B C D A B C D A

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    Larry Fredendall created a sinking fund to invest $73,314.71 over 5 years into 5 different investments (A1, B1, C1, D1, A2, etc.) with the objective of meeting cash flow needs in future years. The investments were constrained to provide $20,000 in year 2, $22,000 in year 3, $24,000 in year 4, $26,000 in year 5, while managing risk between the years. The optimal investment allocation met all cash flow needs and risk constraints.

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    Figure 3.16.xlsx

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    Larry Fredendall created a sinking fund to invest $73,314.71 over 5 years into 5 different investments (A1, B1, C1, D1, A2, etc.) with the objective of meeting cash flow needs in future years. The investments were constrained to provide $20,000 in year 2, $22,000 in year 3, $24,000 in year 4, $26,000 in year 5, while managing risk between the years. The optimal investment allocation met all cash flow needs and risk constraints.

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    13 views2 pages

    Larry Fredendall's Sinking Fund: A B C D A B C D A

    Uploaded by

    Yadav_Bae
    Larry Fredendall created a sinking fund to invest $73,314.71 over 5 years into 5 different investments (A1, B1, C1, D1, A2, etc.) with the objective of meeting cash flow needs in future years. The investments were constrained to provide $20,000 in year 2, $22,000 in year 3, $24,000 in year 4, $26,000 in year 5, while managing risk between the years. The optimal investment allocation met all cash flow needs and risk constraints.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xlsx, pdf, or txt
    of 2

    Larry Fredendall's Sinking Fund

    A1 B1 C1 D1 A2 B2 C2 D2 A3
    Inv A Inv B Year Inv C Inv D Inv A Inv B Inv C Inv D Inv A Year
    Year 1 1 Year 1 Year 1 Year 2 Year 2 Year 2 Year 2 3
    $ Invested 0.00 61,064.11 3,804.66 8,445.95 0.00 0.00 0.00 0.00 38,227.50
    Objective coeff 1 1 1 1
    Constraints:
    Y2 cash flow 1.05 -1 -1 -1 -1
    Y3 cash flow 1.13 1.05 -1
    Y4 cash flow 1.28 1.13 1.05
    Y5 cash flow 1.40 1.28
    Y6 cash flow 1.40
    Y1 risk 1 1
    Y2 risk 1 1 1 1
    Y3 risk 1 1 1 1
    Y4 risk 1 1 1
    Y5 risk 1
    B3 C3 A4 B4 A5
    Inv B Year Inv C Inv A Inv B Year Inv A
    3 Year 3 Year 4 4 Year 5
    10,774.93 0.00 0.00 23,008.85 0.00
    $73,314.71

    0.00 = 0.00
    -1 -1 20000.00 = 20000.00
    -1 -1 22000.00 = 22000.00
    1.13 1.05 -1 24000.00 = 24000.00
    1.28 1.13 1.05 26000.00 = 26000.00
    12250.61 <= 14662.94
    12250.61 <= 14662.94
    1 12250.61 <= 12250.61
    1 8445.95 <= 8445.95
    1 0.00 <= 4601.77
    LHS Sign RHS

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