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Credit Analysis Problem # 3: OB 1's credit manager studied its customer and discovered that 92% were prompt payers. The records also showed that 18%
Credit Analysis Problem # 3: OB 1's credit manager studied its customer and discovered that 92% were prompt payers. The records also showed that 18% of the slow payers and 3%of the prompt payers subsequently defaulted. The company now has 1500 accounts in its books, none of which has defaulted. Revenue from sale of $2,000 and cost of sales is $1,740. How much should prices be increased to make extending credit slow payers worthwhile?
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