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Sobeys Sells Fruit Trays Consisting of Pineapple and Melons

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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?


Definitions:

Present Value

The current worth of a future sum of money or stream of cash flows, given a specified rate of return.

Cash Inflows

The total amount of money being received by a company, usually from its operations, investments, or financings.

Depreciation Expense

Refers to the allocation of the cost of a tangible asset over its useful life.

Incremental Net Income

The increase in net income resulting from a particular business decision compared to the scenario where the decision is not made.

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