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Chapter 20 Saved Help Save & Consider the case of the Cast Iron Company. On each nondelinquent sale, Cast Iron receives revenues with a present
Chapter 20 Saved Help Save & Consider the case of the Cast Iron Company. On each nondelinquent sale, Cast Iron receives revenues with a present value of $1,380 and incurs costs with a present value of $1,000. Cast Iron's costs have increased from $1,000 to $1,230. Assuming that there is no possibility of repeat orders and that the probability of successful collection from the customer is p=0.85, answer the following. a-1. What is the expected profit of granting credit? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.) points eBook Expected profit(loss) per sale Print a-2. Should Cast Iron grant or refuse credit? Refuse Grant b. What is the break-even probability of collection? (Enter your answer as a percent rounded to 1 decimal place.) Break-even probability
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