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A&M Hardware assumes new customers will default 8 percent of the time but if they dont default, they will become repeat customers who always pay
A&M Hardware assumes new customers will default 8 percent of the time but if they dont default, they will become repeat customers who always pay their bills. Assume the average sale is $383 with a variable cost of $260, and a monthly required return of 1.65 percent. What is the NPV of extending credit for one month to a new customer?
$6,103.47
$6,858.18
$6,598.18
$5,748.09
$5,589.09
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