Ajax predicts that if a customer pays on the first sale, it is assured that it is a reliable customer. As such, it expects that customer to generate a net profit of $350 per year for 12 years Ajax calculates present value with a 15% rate of return. There is a 90% probability that Ajax will secure a reliable customer However, if the customer defaults, Ajax will have to incur a loss of $500. 

Determine the expected benefit if credit is granted.

Answer rating: 100% (QA)

To determine the expected benefit if credit is granted we can calculate the expected value tak... View the full answer