Blossom's Flowers Purchases Roses for Sale for Valentine's Day

question 61

Multiple Choice

Blossom's Flowers purchases roses for sale for Valentine's Day.The roses are purchased for $10 a dozen and are sold for $20 a dozen.Any roses not sold on Valentine's Day can be sold for $5 per dozen.The owner will purchase 1 of 3 amounts of roses for Valentine's Day: 100,200,or 400 dozen roses.Given 0.2,0.4,and 0.4 are the probabilities for the sale of 100,200,or 400 dozen roses,respectively,then the EVPI for buying roses is

• A)$700
• B)$1,500
• C)$1,900
• D)$2,600

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Definitions:

Price Hike

A general increase in the cost of goods and services, often due to inflation or increased production costs.

Unit Sales

The total units of a product that a company sells in a particular period.

Traceable Fixed Expense

A fixed cost that can be directly linked to a specific cost object, such as a product, department, or project.

Unit Sales

The total quantity of units of a product sold in a specific period.