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A sells a product for 1200 when the cost of production is only 900. Their average customer has a 90% probability to pay and takes
A sells a product for 1200 when the cost of production is only 900. Their average customer has a 90% probability to pay and takes 1 year to make the payment. The WACC for A is 11% per annum. You will have an option of reselling to the same customer when you receive the payment. The probability of payment and time taken to pay remain the same. However, a customer will buy the product for a maximum of 4 times. What is the NPV of selling to a new customer?
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