Flowers Galore is considering a merger with Balloons N More. Flowers Galore's total operating costs of producing services are $400,000 for a sales volume of $4 million. Balloons' total operating costs of producing services are $30,000 for a sales volume of $700,000. If the two firms merge, calculate the total average cost for the merged firm assuming no synergies.
A) 4.29 percent
B) 9.15 percent
C) 10.00 percent
D) 7.14 percent

Question

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The Answer of Flowers Galore is considering a merger with Balloons N More. Flowers Galore's total operating costs of producing services are $400,000 for a sales volume of $4 million. Balloons' total operating costs of producing services are $30,000 for a sales volume of $700,000. If the two firms merge, calculate the total average cost for the merged firm assuming no synergies.
A) 4.29 percent
B) 9.15 percent
C) 10.00 percent
D) 7.14 percent

Flowers Galore Is Considering a Merger with Balloons N More