What is the expected profit of granting credit

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Reference no: EM131188760

On each nondelinquent sale Cast Iron revenues with a present value of $1,340 and incurs osts with a present value of $1,190. Assume there is no possibilty of repeat orders and that the probability of successful collection from the customer is p = .85

a. what is the expected profit of granting credit? (A negeative amount should be indicated by a minus sign. do not round intermediate calcuations. round your answer to 2 decimal places)

expected profit $_________per sale

a. 2 should Cash Iron (grant or refuse) credit?

b. what is the break-even probability of collection? (Enter your answer as a percent rounded to 1 decimal place)

break-even probability __________%

Reference no: EM131188760

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What is the expected profit of granting credit : On each nondelinquent sale Cast Iron revenues with a present value of $1,340 and incurs osts with a present value of $1,190. Assume there is no possibilty of repeat orders and that the probability of successful collection from the customer is p = .85..

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