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You are considering a temporary opening of a kiosk in the local mall. Any sale you make will be a one-time sale. There is only
You are considering a temporary opening of a kiosk in the local mall. Any sale you make will be a one-time sale. There is only a 45 percent chance that you will collect your money on a credit sale. The product you want to sell has a variable cost of $4.10 and a sales price of $5.75. The monthly interest rate is 1.3 percent. Should you offer people 30 days to pay? Why or why not? Yes; because you will earn $2.23 on every credit sale you make. Yes; because you will earn $5.68 on every credit sale you make. No; because the net present value of the potential sale is - $1.55. No; because the net present value of the potential sale is $.98. It doesn't matter; because the present value of the potential sale is $0
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