## MGMT3390 Management Information Systems- Extra Credit Problem.

MGMT3390 Management Information Systems- Extra Credit Problem.

The following problems are related to chapter 2, i.e., decision making. You need to use Excel to do the following problems. Upload your solution excel workbook to the Blackboard folder.
1. I am planning to setup a scholarship fund where a monthly amount is granted to the scholarship recipients. One of the options available is to make one initial investment in an instrument where the monthly payout (or return) is based on a fixed annual interest rate. The earnings are calculated based on simple interest. I need to determine the different investments and the number of recipients. Perform a What-if-analysis to show the relationships between the different choices.
The costs are as follows:
Cost per recipient = \$50.00
Monthly fund maintenance cost = \$500.00
One time cost for setting up the fund = 1 % of the initial investment = 0.01 * initial investment
Yearly earnings from investment = 6.75% of the initial investment = 0.0675 * initial investment
Monthly earnings from investment = 0.0675 * initial investment/ 12
2. I am planning to do investments in three investment funds A, B and C. I intend to invest a total of \$200,000. Due the requirements of the funds, the following constraints exist. I will have to invest in at least 100 units of fund A. Due to the high risk associated with fund C, I do not want to invest in more than 150 units of fund C.
Following are unit (share) prices of the funds and the their earning potential:
Price/unit (share) Net Earnings/unit (share)
Fund A \$ 500 per unit 15%
Fund B \$ 350 per unit 18%
Fund C \$ 400 per unit 30%
I want to maximize earnings, what is the best mix of investments I must make?
Goal = maximum earnings
3. Create your own scenario to do a what-if-analysis. Perform a what-if-analysis for the scenario.