What credit decision is appropriate for a potential customer that offers an 80 percent chance of paying

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What credit decision is appropriate for a potential customer that offers an 80 percent chance of paying in one month on a $2,000 sale that has a present value of cost of $1,600 when the monthly interest rate is 1 percent?

Grant credit since expected profit is $317

Refuse credit since expected loss is $16

Grant credit since expected profit is $400

Refuse credit since expected loss is $400

Refuse credit since expected profit is zero

Related Book For answer-question

Managerial Communication Strategies and Applications

ISBN: 978-1483358550

6th edition

Authors: Geraldine E. Hynes

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Posted Date: Jan 17, 2020 09:19 AM

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What credit decision is appropriate for a potential customer that offers an 80 percent chance of paying

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Cost 1600 Probability weighted payme... View the full answer

Managerial Communication Strategies and Applications

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