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What is the net present value of decision

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Alex is new in town and has asked to establish credit with your firm. He would like to buy some equipment today at a cost of $2,495. Your variable cost for that equipment is $1,875 and your monthly interest rate is 1.3 percent. You believe that Alex could become a regular customer if you grant him 30 days credit. You also believe that the probability of default is only 3 percent. What is the net present value of this decision?

Reference no: EM131757580

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