CaseWorks: Case Study
Winter 2010
ZigZag Zippers: Funding a Long-term Capital Project
As a zipper company seeks to renovate a 100-year old factory, how can it structure the least expensive portfolio of bonds to fund the project?
ZigZag Zippers remained loyal to Lowell, Massachusetts long after other manufacturing companies had abandoned the town. Now ZigZag is ready to take its commitment a step further with the renovation of its 100-year old factory. The company's investment committee is considering buying four government bonds, and wants to create the least expensive portfolio that will provide cash flows equal to or exceeding the project's costs. In this case students use a linear-programming formulation to support their development of bond portfolio that meets the project's requirements.
Case id: 090213
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