Problem 31-16 Credit policy The Branding Iron Company sells its irons for $67 apiece wholesale. Production cost is $57 per iron. There is a 18% chance that wholesaler Q will go bankrupt within the next eight months. Q orders 1,000 irons and asks for eight months credit. Assume that the discount rate is 12% per year, there is no chance of a repeat order, and Q will pay either in full or not at all.

a. Calculate the NPV of the order ____

b. should you accept the order?