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4) A new customer has sent you an order for $500,000. You have determined that the customer is a good credit risk but your vice
4) A new customer has sent you an order for $500,000. You have determined that the customer is a good credit risk but your vice president still questions whether or not the order should be accepted. Your daily expenses for credit collections and administration are $0.12 per dollar of sales while your variable cost ratio is $80.58 per dollar of sales. The credit terms are net 30 days but you expect payment in 36 days. Your interest rate is 0.00027397 per day. Calculate the NPV you expect from extending the credit. Should you accept the order? Explain
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