A nursery has the choice of planting trees in the ground or in pots prior to sale.

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A nursery has the choice of planting trees in the ground or in pots prior to sale. The pots cost \($5\) each and potted trees must be watered 100 times per year. Trees that are planted in the ground must be watered 25 times per year. Each watering costs \($0.05\) in water and labor. When sold, the trees planted in the ground must be dug up with a backhoe. The total cost of digging up each tree and putting the roots in a burlap sack is \($10\) per tree. The average time between planting and selling a tree is two years.

Should the nursery use pots?

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Management Accounting In A Dynamic Environment

ISBN: 9780415839020

1st Edition

Authors: Cheryl S McWatters, Jerold L Zimmerman

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