Question
a.If the variable cost per unit is $60, the current price is $140, and the monthly required return is 3.0%. What is the break-even Probability
a.If the variable cost per unit is $60, the current price is $140, and the monthly required return is 3.0%. What is the break-even Probability of Default for a company that is assessing granting credit for a new customer? Assume the customer is a repeat business.
b.A company is assessing granting credit to a new customer. The variable cost per unit is $90, the current price is $125, the probability of default is 34% and the monthly required return is 3.0%. Calculate the NPV if we are looking at repeat business.
c. A company with an inventory that has a $3.5 per unit carrying cost. The fixed order cost is $58 per order and the firm sells 100,000 units per year. How many orders should be placed based on EOQ
please explain thanks
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