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A customer wants to buy a motorcyle whose price is $25 000 by writing a check payable after 3 months. The cost of producing a
A customer wants to buy a motorcyle whose price is $25 000 by writing a check payable after 3 months. The cost of producing a motorcycle is $ 20 000 and the annual interest rate is 20%. If the firm thinks that the probability of the checks payment is 0.8; will the firm accept to sell this motorcycle by extending trade credit (accepting the check) to the customer?
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