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A contractor, who has $12 million dollars budget, is planning for his 2019 investments. The...

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Accounting

A contractor, who has $12 million dollars budget, is planning for his 2019 investments. The average after tax yearly profit for public school and residential construction is 7% and 8%, respectively. The third option is to invest in the stock market where the average yearly profit is predicted to be 12% (after tax). In order to benefit from tax exemptions, the tax advisor recommends that contractors involvement in public school construction be at least 3 times as compared to residential building. Investment in stock market is very risky, so the contractor is not willing to put more than $ 2 million in it. What is the best 2019 investment scenario? Calculate the corresponding profit. (use graphical procedure)

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