Surf City sells its network browsing software for $17 per copy to computer software distributors and allows its customers 1 month to pay their bills. The cost of the software is $11 per copy. The industry is very new and unsettled, however , and the probability that a new customer granted credit will go bankrupt within the next month is 15%. The firm is considering switching to a cash on delivery credit policy to reduce its exposure to defaults on trade credit. The discount rate is 2% per month Required: a-1. What is the present value of the expected profit under the current credit policy 0-2. What is the expected profit under the cash-on-delivery policy? If the firm switches policies, sales will fall by 45% b-1. What would be the present value of the expected profit if a customer that is granted credit and pays its bills can be expected to generate repeat orders with negligible likelihood of default for each of the next 6 months? Similarly, customers that pay cash also will generate on average 6 months of repeat sales b-2. What would be the present value of the expected profits under the cash on delivery policy, given the sales information from (b112 S. Reg A1 and A2 Reg B1 and 2 a-1. What is the present value of the expected profit under the current credit policy? (Do not round intermediate calculations, Round your answer to 2 decimal places) a-2. What is the expected profit under the cash-on-delivery policy? If the firm switches policies, sales will fall by 45% (DO not round Intermediate calculations, Round your answer to 2 decimal places) Show less -1 a-2 Present value of expected profit Present value of expected profit Reg A1 and A2 Rey B1 and 2 b-1. What would be the present value of the expected profit if a customer that is granted credit and pays its bills can be expected to generate repeat orders with negligible likelihood of default for each of the next 6 months? Similarly, customers that pay cash also will generate on average 6 months of repeat sales. (Do not round Intermediate calculations. Round your answer to 2 decimal places.) b-2. What would be the present value of the expected profits under the cash-on-delivery policy, given the sales information from (b-1)? (Do not round Intermediate calculations. Round your answer to 2 decimal places.) Show less 6-1. b-2 Present Value of expected profit Present value of expected profit