Sobeys Sells Fruit Trays Consisting of Pineapple and Melons

question 1

Essay

Sobeys sells fruit trays consisting of pineapple and melons. The manager of the fruit department obtains pineapples at a wholesale price of $2.50 per kg, grapes at $2.15 per kg, strawberries at $1.50 per kg and melons at $1.85 per kg. He is required to produce 10 kg of the mixed fruit. He is required to add 2 kg of strawberries and 3 kg of grapes. What is the maximum weight of pineapple that he can put in the mix in order to have an effective wholesale cost no greater than $2.00 per kg?

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Definitions:

Rate Of Return

A measure used to evaluate the financial performance of an investment, calculating the gain or loss relative to the asset's initial cost.

Discount Rate

The interest rate used in discounted cash flow analysis to determine the present value of future cash flows or the rate charged by central banks on loans to commercial banks.

Lump Sum

A single payment made at a particular time, as opposed to multiple payments made over time.

Insurance Settlement

The payment made by an insurance company to fulfill its obligation under an insurance policy.