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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 $
and Incurs costs with a present value of $ Cast Iron's costs have Increased from $ to $ Assuming that there is no
possibility of repeat orders and that the probability of successful collection from the customer is answer the following.
a 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
decimal place.
a Should Cast Iron grant or refuse credit?
b What is the breakeven probability of collection?
Note: Enter your answer as a percent rounded to decimal place.
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