14. Credit Decision. Look back at Example 20.3. Cast Iron's costs have increased from $1,000 to $1,050.
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14. Credit Decision. Look back at Example 20.3. Cast Iron's costs have increased from $1,000 to $1,050. Assuming that there is no possibility of repeat orders, and that the probability of suc- cessful collection from the customer is p = .95, answer the following: (LO4)
a. Should Cast Iron grant or refuse credit?
b. What is the break-even probability of collection?
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Related Book For
Fundamentals Of Corporate Finance
ISBN: 9780073382302
6th Edition
Authors: Richard A Brealey, Stewart C Myers, Alan J Marcus
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