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Problem 31-18 Credit policy Cast Iron Company, on each nondelinquent sale, receives revenues with a present value of $1,260 and incurs costs with a value of $1,030. Cast Iron has been asked to extend credit to a new customer. You can find little information on the firm but you believe that the probability of payment is no better than 0.79 and that there will be a repeat order in one year if payment occurs. If the discount rate is 15%, calculate the minimum probability of payment on the repeat order at which credit can be extended. Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. L Minimum probability %

Problem 31-18 Credit policy Cast Iron Company, on each nondelinquent sale, receives revenues with a present value of $1,260 and incurs costs with a value of $1,030. Cast Iron has been asked to extend credit to a new customer. You can find little information on the firm but you believe that the probability of payment is no better than 0.79 and that there will be a repeat order in one year if payment occurs. If the discount rate is 15%, calculate the minimum probability of payment on the repeat order at which credit can be extended. Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. L Minimum probability %

A First Course in Probability (10th Edition)
A First Course in Probability (10th Edition)
10th Edition
ISBN:9780134753119
Author:Sheldon Ross
Publisher:Sheldon Ross
Chapter1: Combinatorial Analysis
Section: Chapter Questions
Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...
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Problem 31-18 Credit policy Cast Iron Company, on each nondelinquent sale, receives revenues with a present value of $1,260 and incurs costs with a value of $1,030. Cast Iron has been asked to extend credit to a new customer. You can find little information on the firm but you believe that the probability of payment is no better than 0.79 and that there will be a repeat order in one year if payment occurs. If the discount rate is 15%, calculate the minimum probability of payment on the repeat order at which credit can be extended. Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. C Minimum probability %
Transcribed Image Text:Problem 31-18 Credit policy Cast Iron Company, on each nondelinquent sale, receives revenues with a present value of $1,260 and incurs costs with a value of $1,030. Cast Iron has been asked to extend credit to a new customer. You can find little information on the firm but you believe that the probability of payment is no better than 0.79 and that there will be a repeat order in one year if payment occurs. If the discount rate is 15%, calculate the minimum probability of payment on the repeat order at which credit can be extended. Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. C Minimum probability %
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