A Customer Has Ordered Goods Generating a Present Value of $2,000

question 55

Multiple Choice

A customer has ordered goods generating a present value of $2,000. The present value of production costs is $1,800. Under what conditions should you extend credit if there is no possibility of repeat orders?

• A)If the probability of payment exceeds 0.67
• B)If the probability of payment exceeds 0.75
• C)If the probability of payment exceeds 0.80
• D)If the probability of payment exceeds 0.90

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Definitions:

Pica

A disorder characterized by the persistent ingestion of non-nutritive substances, such as dirt or paper, not typical for one's age or culture.

Hospitalization

The process of admitting a person into a hospital for medical treatment and care.

Systolic Blood Pressure

The pressure in the arteries when the heart muscle contracts and is the higher of the two blood pressure measurements, such as 120 in 120/80.

Anorexia Nervosa

An eating disorder characterized by an obsessive fear of gaining weight, leading to restricted food intake and extreme weight loss.