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What is the expected profit of granting credit

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Question - Consider the case of the Cast Iron Company. On each nondelinquent sale, Cast Iron receives revenues with a present value of $1,390 and incurs costs with a present value of $1,000. Cast Iron's costs have increased from $1,000 to $1,240. Assuming that there is no possibility of repeat orders and that the probability of successful collection from the customer is p = 0.95, answer the following.

Required - What is the expected profit of granting credit?

Reference no: EM132716101

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What is the expected profit of granting credit : On each nondelinquent sale, Cast Iron receives revenues with a present value of $1,390. What is the expected profit of granting credit
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