Consider the case of the Cast Iron Company. On each nondelinquent sale, Cast Iron receives revenues with a present value of $$1,220$

and incurs costs with a present value of $$1,000.$ Cast Iron's costs have increased from $$1,000$ to $$1,070.$ Assuming that there is no

possibility of repeat orders and that the probability of successful collection from the customer is $p=0\mathrm{.}97,$ answer the following.

a$-1.$ What is the expected profit of granting credit?

Note: Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to $1$

decimal place.

a$-2.$ Should Cast Iron grant or refuse credit?

b$.$ What is the break$-$even probability of collection?

Note: Enter your answer as a percent rounded to $1$ decimal place.