You are producing and selling backpacks. Your sales price is $100 and present value of costs is
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You are producing and selling backpacks. Your sales price is $100 and present value of costs is $80. You collect 25% of the price in cash immediately (at the time of sale), and allow your costumers pay the remaining amount in one month (30 days). If a customer’s probability of default is 0.27, should you sell your product to this customer? Assume monthly interest rate is 1%.
Related Book For
Fundamentals of Corporate Finance
ISBN: 978-0077861629
8th Edition
Authors: Stephen A. Ross, Randolph W. Westerfield, Bradford D.Jordan
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