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A firm has been asked to consider a one-time credit sale under the following terms: Selling price = $763,000 Variable cost ratio = 92% Credit

A firm has been asked to consider a one-time credit sale under the following terms:

Selling price = $763,000

Variable cost ratio = 92%

Credit period = 120days (4 months)

Cost of funds = 3.5% (annual rate)

Default probability = 3.8%

What is expected NPV? Show the work

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