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

Table of ContentAbstractList of Table State of Problem Constraints Analysis of the Problem Objective Function Solutions and Results Graphical Solutions Extreme Points and Optimal Point Slack and Surplus Dual Price Range of Optimality Range of R.H.S Value Discussion Excel Summary Managerial Report Conclusion Work Contribution Reference Cited 4 5 6 6-7 8 9-11



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AbstractHart 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.



Security Systems Net Present Value (100 Percent funding) $ 1,800,000

Market Analysis $ 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 6ecurity System Stock Market Analysis 61% 600000 600000 250000 1 1 87% 500000 350000 400000 Maximization