I know the first part but need help with the second part (charts).

all of the information including the four CP's is in the problem. Im not sure why the expert is saying its missing.

all of the information is provided twice in the picture both in the words and in the chart. If ypu can't read then move along and don't comment on my post. I've loooked over everything and there is absolutely no reason that you shpuldnt be able to answer the question with the pictures provided.

stop being dumb and actually take the time to read it. there is no clarity missing. this is absolutely ridiculous.

zoom in boomers

2) A firm is evaluating the following sales opportunity for a new customer: S($175,000) = Projected invoice amount VCR (65% of Sales) = Variable production costs EXP (1% of Sales for each CP after the first one) = Credit and collection costs i (10%), (0.10/365) = Annual; daily interest rate Credit Period (Net 45 days) 1. Calculate the NPV for the potential sale assuming the new customer pays on time. Should the firm extend trade credit for this sale? NPV = S- EXP(S) - VCR(S) 1 + iCP 2. Given the uncertainly of payment timing, assume the new customer is expected to mirror the firm's historical collection experience (shown below). COLLECTION PERIOD CP DO PAYMENT PROBABILITY 45 Days 3 2 53 3 51 After 90 days, the invoice is tumed over to a collection agency that collects, on average, 50% of the invoice one month after the referral and charges a 30% commission on the invoice amount (not the amount collected). Re-calculate the NPV and determine if trade credit should still be offered. Collection PV of Cash Flow at Collection at DSO t=0 Payment Collection Probability Costs (EXP) Expected NPV Collection Period Probable NPV Lapply prob. ) DSO VCR 1 38 50% 2 53 30% 3 81 15% 120 5% Expected NPV of Credit Extension 100% Re-calculate the NPV using a probability distribution that reflects more uncertainty and risk and determine if trade credit should still be offered. Use 10%, 30%, 25%, and 35%, respectively, for the four CPs. Should trade credit still be offered? Collection PV of Payment Collection Cash Flow at collection at Probability Costs (EXP) DSO Expected NPV Collection Period OSO to VCR Probable NPV (apply prob. $ 1 38 10% 2 53 30% 3 81 25% 4 120 35% Expected NPV of Credit Extension 100%