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Consider the case of the Cast Iron Company. On each nondelinquent sale, Cast Iron recelves revenues with a present value of $ 1 , 2

Consider the case of the Cast Iron Company. On each nondelinquent sale, Cast Iron recelves revenues with a present value of $1,210
and Incurs costs with a present value of $1,000. Cast Iron's costs have Increased from $1,000 to $1,060. Assuming that there is no
possibility of repeat orders and that the probability of successful collection from the customer is p=0.96, answer the following.
a-1. What is the expected profit of granting credit?
Note: Negatlve amount should be Indlcated by a minus sign. Do not round Intermedlate 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.
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