The default rate of Demurrage Associates' new customers has been running at 10%.The average sale for each new customer amounts to $800,generating a present value of profit of $100 and a 40% chance of a second order next year.The default rate on second orders is only 2%.If the interest rate is 9%,what is the expected profit from each new customer? (Examine only the first two periods of potential orders.)

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The Answer of The default rate of Demurrage Associates' new customers has been running at 10%.The average sale for each new customer amounts to $800,generating a present value of profit of $100 and a 40% chance of a second order next year.The default rate on second orders is only 2%.If the interest rate is 9%,what is the expected profit from each new customer? (Examine only the first two periods of potential orders.)

The Default Rate of Demurrage Associates' New Customers Has Been