Mary Magnolia in Problem 4 Has Variable Costs Equal to

question 18

Multiple Choice

Mary Magnolia in Problem 4 has variable costs equal to , where y is the number of bouquets she sells per month and where F is the number of square feet of space in her shop. If Mary has signed a lease for a shop with 1,000 square feet, if she is not able to get out of the lease or to expand her store in the short run, and if the price of a bouquet is $5 per unit, how many bouquets per month should she sell in the short run?

• A) 2,500
• B) 500
• C) 1,000
• D) 3,750
• E) 2,750

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Definitions:

Investing Activities

Transactions and events related to the acquisition and disposal of long-term assets and other investments not considered cash equivalents.

Financing Activities

Transactions that involve raising capital or repaying investors, such as issuing shares or taking out loans.

Indirect Method

A way of preparing the cash flow statement where net income is adjusted for changes in balance sheet items to obtain net cash flow from operating activities.

Direct Method

A cash flow statement preparation approach that lists major operating cash receipts and payments, providing a clear view of operating cash flows.