Natashas Flowers, a local florist, purchases fresh flowers each day at the local flower market. The buyer

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Natasha’s Flowers, a local florist, purchases fresh flowers each day at the local flower market.

The buyer has a budget of $950 per day to spend. Different flowers have different profit margins, and also a maximum amount the shop can sell. Based on past experience, the shop has estimated the following NPV of purchasing each type:

NPV per Bunch Cost per Bunch Max. Bunches Roses $ 1 $25 25 Lilies 10 22 10 Pansies 6 31 10 Orchids 21 84 5 What combination of flowers should the shop purchase each day?

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Corporate Finance The Core

ISBN: 9781292431611

5th Global Edition

Authors: Jonathan Berk, Peter DeMarzo

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