Locust Software sells computer training packages to its business customers at a price of $104. The cost of production (in present value terms) is $97. Locust sells its packages on terms of net 30 and estimates that about 5% of all orders will be uncollectible. An order comes in for 30 units. The interest rate is 4% per month.
a-1.Calculate the profit or loss if the sale will not be made unless credit is extended. (Input the amount as a positive value. Do not round intermediate calculations.)
a-2.Should the firm extend credit if this is a one-time order?
b.What is the break-even probability of collection?
Break-even probability %
c-1.Calculate the present value of the sale. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Present value $
c-2. Should credit be extended?
d.What is the break-even probability of collection in the repeat-sales case? (Round your answer to 2 decimal places.)
Break-even probability %
We value our customers and so we ensure that what we do is 100% original..
With us you are guaranteed of quality work done by our qualified experts.Your information and everything that you do with us is kept completely confidential.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.Read more
The Product ordered is guaranteed to be original. Orders are checked by the most advanced anti-plagiarism software in the market to assure that the Product is 100% original. The Company has a zero tolerance policy for plagiarism.Read more
The Free Revision policy is a courtesy service that the Company provides to help ensure Customer’s total satisfaction with the completed Order. To receive free revision the Company requires that the Customer provide the request within fourteen (14) days from the first completion date and within a period of thirty (30) days for dissertations.Read more
The Company is committed to protect the privacy of the Customer and it will never resell or share any of Customer’s personal information, including credit card data, with any third party. All the online transactions are processed through the secure and reliable online payment systems.Read more
By placing an order with us, you agree to the service we provide. We will endear to do all that it takes to deliver a comprehensive paper as per your requirements. We also count on your cooperation to ensure that we deliver on this mandate.Read more