Question
Crisps has received an order for 14000 bags of potato chips from BigBag. Crisps views BigBag to be a long-term customer and believes they will
Crisps has received an order for 14000 bags of potato chips from BigBag. Crisps views BigBag to be a long-term customer and believes they will continue to place the same order year after year forever. Crisps sells its large bags of potato chips for $2.35 each, and calculates its internal cost for the product at $1.45 each. Market research estimates that there is a 35% chance that BigBag will pay in full what it owes. Crisps uses a discount rate of 6.45% for all NPV analysis. Based on this information, calculate the NPV of this credit decision? $ Place your answer to the nearest dollar. Do not use a Dollar sign or commas within your answer.
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