Based on its experience, a department store has developed the following table for the transition probabilities for accounts moving during a 1-month period from either of the two transient categories into one of the four possible categories. Answer all the questions.

Initial Category	Category After 1 Week
	Paid	Bad -debt	0- to 30-Day	31- to 90-Day
Paid	1.00	0.00	0.00	0.00
Bad-debt	0.00	1.00	0.00	0.00
0- to 30-Day	0.55	0.00	0.10	0.35
31- to 90-Day	0.65	0.11	0.20	0.04

1. What percentage of the accounts in the two transient categories will eventually be paid, and what percentage will end up as bad debts?
2. If the amounts in the two transient categories at the beginning of June are Php2,150,000 and Php3,690,000, what amounts will eventually be paid?
3. To encourage customers to pay promptly, the manager of accounts receivable at the department store of the above problem wants to consider offering a 1% rebate in bills that are paid within 30 days. By doing this, he expects that 80% of all bills will be paid within 30 days and the transition probabilities from the 0- to 30-day category will change to:

Initial Category	Category After 1 Week
	Paid	Bad -debt	0- to 30-Day	31- to 90-Day
0- to 30-Day	0.80	0.00	0.05	0.15

If the department stores average monthly sales charged to customers accounts are Php2,500,000, would you advise offering the 1% rebate?