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Answer to this one please, thank you The default rate of Don's new customers has been running at 25 percent. The average sale for each
Answer to this one please, thank you
The default rate of Don's new customers has been running at 25 percent. The average sale for each new customer amounts to $750, generating a present value of profit of $300 and a 25 percent chance of a second order next year. The default rate on second orders is only 5 percent. If the interest rate is 5 percent, what is the expected profit from each new customer? O $178.13 O $243.75 O $161.72 O $159.38Step by Step Solution
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