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Firm A is a successful firm and thus the going concern is applied. The credit policy is net 30 days. The price per unit is
Firm A is a successful firm and thus the going concern is applied. The credit policy is net 30 days. The price per unit is $50, the variable cost per unit is $30, and the monthly required return is 2%. The probability of default is 10%. Calculate the NPV of extending credit based on the assumption that a new customer who does not default the first time remains a customer forever and never defaults
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