Dave has $100,000 to invest in 10 mutual fund alternatives with the following restrictions. For diversification, no more than $25,000 can be invested in any one fund. If a fund is chosen for investment, then at least $10,000 will be invested in it. No more than two of the funds can be pure growth funds, and at least one pure bond fund must be selected. The total amount invested in pure bond funds must be at least as much as the amount invested in pure growth funds. Using the following expected returns, formulate and solve a model that will determine the investment strategy that will maximize expected annual return.

You are the owner of a local honda dealership. unlike other dealerships in the area, you take pride in your “no haggle” sales policy. last year, your dealership earned record profits of $1.5 million. however, according to the local chamber of commerce, your earnings were 10 percent less than either of your competitors. in your market, the price elasticity of demand for midsized honda automobiles is 4.5. in each of the last five years, your dealership has sold more midsized automobiles than any other honda dealership in the nation. this entitled your dealership to an additional 30 percent off the manufacturer’s suggested retail price (msrp) in each year. taking this into account, your marginal cost of a midsized automobile is $11,000. what price should you charge for a midsized automobile if you expect to maintain your record sales?