A hunger-relief organization has earmarked between $2 million and $3.5 million (inclusive) for aid to two African countries, Country A and Country B. Country A is to receive between $1 million and $1.25 million (inclusive), and Country B is to receive at least $1 million. It has been estimated that each dollar spent in Country A will yield an effective return of $0.50, whereas a dollar spent in Country B will yield an effective return of $0.90. How should the aid be allocated if the money, in millions, is to be utilized most effectively according to these criteria?

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3 June, 22:54

A hunger-relief organization has earmarked between $2 million and $3.5 million (inclusive) for aid to two African countries, Country A and Country B. Country A is to receive between $1 million and $1.25 million (inclusive), and Country B is to receive at least $1 million. It has been estimated that each dollar spent in Country A will yield an effective return of $0.50, whereas a dollar spent in Country B will yield an effective return of $0.90. How should the aid be allocated if the money, in millions, is to be utilized most effectively according to these criteria?

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Brayan Jenkins · Answer 1

It is clear that the yield in country B is higher than that of country A, although country A could sometimes receive more money, since it moves in a range, while country B always receives the same amount, the key factor is to measure the cost of performance that each country has, that is, just knowing the performance is not enough to make a decision, it is necessary to make a social assessment of projects that although not financial should be evaluated from the costs of generating such profitability.