Ali Storage Company projects 800 customers next year.Of these, 600 have been proﬁtable and
have never defaulted on past obligations, while 200 have not been proﬁtable.All of the unproﬁtable
accounts are expected to default if given credit.Ali can pay £0.40 to an agency that will tell them
whether a customer has been proﬁtable.If Ali's price per unit is £10, and its cost per unit is £6,
should they allow the credit check to be performed? Assume a discount rate of 1%.

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The Answer of Ali Storage Company projects 800 customers next year.Of these, 600 have been proﬁtable and
have never defaulted on past obligations, while 200 have not been proﬁtable.All of the unproﬁtable
accounts are expected to default if given credit.Ali can pay £0.40 to an agency that will tell them
whether a customer has been proﬁtable.If Ali's price per unit is £10, and its cost per unit is £6,
should they allow the credit check to be performed? Assume a discount rate of 1%.

Ali Storage Company Projects 800 Customers Next Year