The default rate of Don's new customers has been running at 20%.The average sale for each new customer amounts to $500,generating a present value of profit of $200 and a 30% chance of a second order next year.The default rate on second orders is only 5%.If the interest rate is 6%,what is the expected profit from each new customer?

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The Answer of The default rate of Don's new customers has been running at 20%.The average sale for each new customer amounts to $500,generating a present value of profit of $200 and a 30% chance of a second order next year.The default rate on second orders is only 5%.If the interest rate is 6%,what is the expected profit from each new customer?

The Default Rate of Don's New Customers Has Been Running