c. A new client from out of town is quoted $5,500 for a repair. The service people ask you to approve this. You do a quick check on the client and assess a 10% default risk. What is the NPV of the client? What is the break-even probability? What is the minimum probability of collecting for you to approve the service?

IMPORTANT: PLEASE SHOW FORMULAS USED TO CALCULATE INSIDE THE FORMULAS

H. G c) One-Time Client Repair cost Default probability NPV of client Break-even probability Extend credit if probability of getting paid is higher than H. G c) One-Time Client Repair cost Default probability NPV of client Break-even probability Extend credit if probability of getting paid is higher than