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Burnaby Inc. current sales consist of 60 units per month at a price of $95 a unit. You are considering switching to a net 30
Burnaby Inc. current sales consist of 60 units per month at a price of $95 a unit. You are considering switching to a net 30 credit policy from your current cash only policy. If you switch, the credit price will be $100 and the cash price will be $95 a unit. The monthly interest rate is 1.25 percent. What is the break-even default rate of the proposed switch?
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