Your company is considering granting credit to a new customer. The price per unit is $165 and the variable cost per unit is $150. The monthly interest rate is 0.8%. The customer will pay in 30 days if
He does not default. If the customer does not default, he will buy one unit every month forever.
What is the break-even default percent?
A) 3.7%
B) 8.0%
C) 61.5%
D) 88.0%
E) 92.0%
Correct Answer:
Verified
Q159: The Gardeners Co. currently sells 1,800 units
Q160: Altoa, Inc. currently sells 3,100 units a
Q162: A firm sells 45,000 units a year.
Q163: Your company purchased $10,000 worth of inventory
Q165: One popular child's toy sells for $39.99.
Q166: Naomi Corporation is open all year, and
Q167: Your current sales consist of 60 units
Q169: A firm offers credit terms of 1/5,
Q173: Your company purchased $10,000 worth of inventory
Q175: What is the break-even default rate?
A) 3.2%
B)
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents