Hart Venture Capital

HART Venture Capital Capital Allocation Plan for Security System and Market Analysis for three years

Table of Content Abstract

I

List of Table

II-VIII

State of Problem

1

Constraints

2

Analysis of the Problem Objective Function

3

Solutions and Results Graphical Solutions

4

Extreme Points and Optimal Point

5

Slack and Surplus

6

Dual Price

6-7

Range of Optimality

8

Range of R.H.S Value

9-11

Discussion Excel Summary Managerial Report

12 13-16

Conclusion Work Contribution Reference Cited

17 18 19

Abstract Hart Venture Capital (HVC) is a company of providing venture capital for software development and Internet application. Currently, there are two companies: Security Systems and Market Analysis need additional capital. Security package needs additional capital to develop an Internet security software package; Market Analysis needs additional capital to develop a software package for conducting customer satisfaction surveys. The company is trying to find the optimal percentage of each project that HVC should fund in order to yield the maximum net present value of the total investment. To solve this problem, linear programming will be used. The problem the firms faces is a maximization problem. The net present value generated by the sum of the net present value multiplied by the recommended percentage of two investments will be the objective function. The answer will be the optimal point of the feasible region within the constraints of the amount of capital available. Capital availability will be the key role in determining how much capital should be allocated to the two companies over three years. The recommended percentages for the two companies will remain unchanged over three years. This paper will solve the problems that the firm faces and look into the change in objective function if additional capital is provided.

I

LIST OF TABLES Page 3

Security Systems

Market Analysis

$

$

Net Present Value (100 Percent funding)

1,800,000

1,600,000

Page 4 　 Years 1 2 3

Investment Opportunities Security System Stock Market Analysis $ 600,000 $ 500,000 $ 600,000 $ 350,000 $ 250,000 $ 400,000

　 $ $ $

Maximum Investment each year 800,000 700,000 500,000

Page 6 ecurity System Stock Market Analysis

　

　 Optimal Solution

　

　

　

Algebra

Maximization

　 -1600000/18000 00

　

Slope

Intercept

87%

Constrain 1

600000

500000