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Evaluating Credit Policy Solar Engines manufactures solar engines for tractor - trailers. Given the fuel savings available, new orders for 1 2 5 units have

Evaluating Credit Policy Solar Engines manufactures solar engines for tractor-trailers.
Given the fuel savings available, new orders for 125 units have been made by customers
requesting credit. The variable cost is $14,800 per unit, and the credit price is $16,100
each. Credit is extended for one period. The required return is 1.9 percent per period. If
Solar Engines extends credit, it expects that 30 percent of the customers will be repeat
customers and place the same order every period forever and the remaining customers
will be one-time orders. Should credit be extended?

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