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Question Based on the following analysis for a $500,000 sales opportunity to a new customer expected to perform similarly to existing customers, the firm should:

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Question Based on the following analysis for a $500,000 sales opportunity to a new customer expected to perform similarly to existing customers, the firm should: Payment Collection Costs Collection Cash Collection Period (CP) DSO NPV Expected NPV Probability (EXP) Flow 90 Days 140 25% $115,000 $85,000 (S268,139.84) (567,034.96) Expected NPV of Credit Extension 100% $36,580.77 Not make the sale on trade credit, as the expected NPV is unacceptable. Not make the sale on trade credit given the 25% chance that there would be a negative O NPV. Make the sale on trade credit, as the expected NPV is acceptable. None of the above

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