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

Question

Quizplus · Accepted Answer

To calculate the expected outcome for buying 200 dozen roses, we need to consider the following possibilities:

1. If 100 dozen roses are sold: 
Profit = (100 x $20) - (100 x $10) = $1,000

2. If 200 dozen roses are sold:
Profit = (200 x $20) - (200 x $10) = $2,000

3. If 400 dozen roses are sold:
Profit = (200 x $20) + (200 x $5) - (200 x $10) = $2,600

So the expected outcome for buying 200 dozen roses would be:
EOL = (0.2 x $1,000) + (0.4 x $2,000) + (0.4 x $2,600) = $900

Therefore, the best choice would be to buy 200 dozen roses with an expected outcome of $900.

Blossom's Flowers Purchases Roses for Sale for Valentine's Day