Thomas Metal Works Produces Specialty Products Which Are Sold to One-Time

Thomas Metal Works produces specialty products which are sold to one-time customers. The variable cost per unit is $776 and the sales price per unit is $949. The monthly interest rate is 1
Percent. Management believes that 10 percent of any credit sales will be uncollectible. The firm
_____ grant credit because the net present value of a sale is _____.

A) should; $70
B) should; $84
C) should not; -$136
D) should not; -$89
E) should not; -$47