index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Fle... Chapter 20 Homework Saved Help Save & Exit Submit Check my work 3 Consider the case of the Cast Iron Company. On each nondelinquent sale, Cast Iron receives revenues with a present value of $1,210 and incurs costs with a present value of $1,000. Cast Iron's costs have increased from $1,000 to $1,060. Assuming that there is no possibility of repeat orders and that the probability of successful collection from the customer is p= 0.96, answer the following. 5 a-1. What is the expected profit of granting credit? (Negative amount should be indicated by a minus sign. Do not round points intermediate calculations. Round your answer to 2 decimal places.) Expected profit (loss) per sale eBook Print a-2. Should Cast Iron grant or refuse credit? O Grant O Refuse b. What is the break-even probability of collection? (Enter your answer as a percent rounded to 1 decimal place.) Break-even probability % Type here to search O BLOW O 9:18 AM 12/10/2020Save & Exit Saved Help Chapter 20 Homework i Check my 4 Anne Teak, the financial manager of a furniture manufacturer, is considering operating a lock-box system. She forecasts that 700 payments a day will be made to lock boxes with an average payment size of $2,500. The bank's charge for operating the lock boxes is $0.40 a check. The interest rate is 0.013% per day points a. If the lock box makes the cash available 2 days earlier, calculate the net daily advantage of the system. (Do not round intermediate calculations.) eBook Net daily advantage Hint Print b. Is it worthwhile to adopt the system? Yes O No c. What minimum reduction in the time to collect and process each check is needed to justify use of the lock-box system? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Mc Gra Type here to search 0 9:18 AM 12/10/2020