A potential customer applies to QQQ Bhd., to purchase on credit. QQQ Bhd., estimates the probability of the customer paying for the purchase on time after the 21-day credit is 55%. Note that the price and cost per unit of product are, respectively, RM24 and RM14, and the required return (EAR) on receivables is 8%.

(e) Should QQQ Bhd., sell to the customer on credit if the customer is a one-time customer? Justify your decision.

(f) If a customer is a likely repeat customer, what is the maximum probability of customer default that could lead QQQ Bhd., to sell on credit to the customer? Justify your decision.