Need help ASAP. Excel not needed.

9.Your firm can investigate the credit of customers who seek credit. If it does, the investigation will identify customers as one of two types. Type 1 will eventually pay their bills with probability .88, and those who pay will pay 16 days after their purchases. Type 2 will eventually pay with probability .65, and payment is delayed by 54 days. Customers who fail to pay in full will pay nothing. 37% percent of consumers percent are type 1, and 63% are type 2. A credit check costs $50. You are considering selling an item at price $1,500. Your variable costs are $1,140 and can be assumed to be incurred at the time of sale. An appropriate discount rate is 5% per year, annually compounded. If you grant credit, you will not charge interest and will not offer a cash discount. If you choose not to extend credit, the customer will buy the item for cash with 20% probability, regardless of whether the customer is good or bad. You can extend credit to all customers, extend credit to no customers, or check creditworthiness and extend credit depending on the results. Which of the three approaches is best?