Question
Ch 30 Q1. The Branding Iron Company sells its irons for $56 apiece wholesale. Production cost is $46 per iron. There is a 31% chance
Ch 30 Q1.
The Branding Iron Company sells its irons for $56 apiece wholesale. Production cost is $46 per iron. There is a 31% chance that wholesaler Q will go bankrupt within the next year. Q orders 1,000 irons and asks for seven months credit. Assume that the discount rate is 11% per year, there is no chance of a repeat order, and Q will pay either in full or not at all.
a. Calculate the NPV of the order. (A negative answer should be indicated by minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.)
NPV $ ___________
b. Should you accept the order?
| Yes | |
| No |
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Forex Analysis And Strategies For Day Traders Profitable Investing With Currency Swaps Hedges And Scalps For Both Beginning And Advanced Traders
Authors: Steve Alkandros
1st Edition
1545117039, 978-1545117033
