PRIN.OF CORP.FINANCE-CONNECT ACCESS
PRIN.OF CORP.FINANCE-CONNECT ACCESS
13th Edition
ISBN: 2810023360757
Author: BREALEY
Publisher: MCG
Question
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Chapter 30, Problem 38PS

a)

Summary Introduction

To determine: Company G’s current profit margin allows for bad debts.

b)

Summary Introduction

To discuss: The way new credit scoring system would affect the profits if firm’s estimates of default rates are right.

c)

Summary Introduction

To discuss: Reasons of Company G estimates of default rates are not realized in real and consequences of such overestimating the accuracy of credit scoring scheme.

d)

Summary Introduction

To discuss: Effect on the assessment proposal when the customer has an existing account with Company G.

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