Info

a. Based on this information, should credit be granted? Basic b. In part (a), what does the credit price per unit have to be to break even? (continued)

c. In part (a), suppose we can obtain a credit report for $2 per customer. Assuming that each customer buys one unit and that the credit report correctly identifies all customers who will not pay, should credit be extended?

5. NPV of Credit Policy Switch Suppose a corporation currently sells Q units per month for a cash-only price of P. Under a new credit policy that allows one month's credit, the quantity sold will be Q and the price per unit will be P'. Defaults will be ^ percent of credit sales. The variable cost is v per unit and is not expected to change. The percentage of customers who will take the credit is a, and the required return is R per month. What is the NPV of the decision to switch? Interpret the various parts of your answer.

Credit Repair

Credit Repair

If You Are Interested In Raising Your Credits, You Won't Want To Miss This Page! Worried About Your Bad Credit? Fret Not! Discover Insider Secrets To Quickly Get Out Of Debt, Erase Your Bad Credit Record And Legally Raise Your Credit Score! Finally! An Info-Packed Guide To Help You Understand The Nuts-And-Bolts Of Credit Repairs And To Assist You In Increasing Your Credits In No Time! Learn Some Little-Known, But Highly Effective Tips And Tricks That Will Shoot Your Credit Score Up!

Get My Free Ebook


Post a comment