XYZ Ltd. is an engineering company producing HT Drives. A new customer in the power transmission business has placed an order for eight HT Drives. The variable cost is 20 lakhs INR per mit and credit price (price when given on credit) is 25 lakhs INR cach Credit is extended for one period and based on historical experience, the probability of default is 15%. The required return is 0.9% per period. If credit is not extended, customer will not buy the product. Assuming. it is a one-time order should it be filled? What is the breakeven probability of default if it is a one-time order? Suppose the customer who does not default becomes a repeat customer and places the same order every period forever and they never default. Should the order be filled when it is a repeat order? 151