Expected opportunity loss in blossoms flowers


Problem:

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 EOL for buying 200 dozen roses is

a) $700
b) $900
c) $1,500
d) $1,600

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Accounting Basics: Expected opportunity loss in blossoms flowers
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