Question

The owner of a greenhouse and nursery is considering whether to spend $6,000 to acquire the licensing rights to grow a new variety of rosebush, which she could then sell for $6 each. Per-unit variable cost would be $3. If her available land has design and effective capacities of 3,000 and 2,000 rosebushes per year, respectively, and she expects to be 80 percent efficient in her use of this land, how many rosebushes does Rose plan to grow each year on this land? a 1,600 b 2,000 c 1,000 d 2,400 e 3,000

Answer 1

Answer:

The number of rosebushes the owner of the a greenhouse and nursery plans to grow every year is 1,600.

Step-by-step explanation:

It is provided that the owner of the a greenhouse and nursery has land available to grow 3000 and 2000 rosebushes every year.

She claims to be 80% efficient in the use of the land available.

She is considering to spend $6000 to acquire the licensing rights to grow a new variety of rosebush.

The variable cost will be $3 and she will sell the rosebushes for $6 each.

The formula to compute the number of rosebushes she plans to grow every year is,

Number of rosebushes = Effective Capacity × Efficiency

                                       $=2000\times 80\%\\=2000\times\frac{80}{100}\\=1600$

Thus, the number of rosebushes the owner of the a greenhouse and nursery plans to grow every year is 1,600.