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Which probabilities of default will company be indifferent

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Reference no: EM132929244

Problem 1: A company has a mark-up of 18 per cent, and a unit costs 70 to produce. At which of the following probabilities of default will the company be indifferent between accepting and rejecting a sale on credit grounds?

a. 0.20
b. 0.13
c. 0.15
d. 0.10

Reference no: EM132929244

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