20-3)

On each nondelinquent sale Cast Iron receives revenues with a present value of $1,390 and incurs costs with a present value of $1,240. Assume there is no possibility of repeat orders and that the probability of successful collection from the customer isp= .95.

a-1.What is the expected profit of granting credit?(A negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.)

Expected profit$per sale

a-2.Should Cast Iron grant or refuse credit?GrantRefuse

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

Break-even probability%