Your Company Is Considering Granting Credit to a New Customer

question 164

Multiple Choice

Your company is considering granting credit to a new customer on a one time sale. The price per unit is $225 and the variable cost per unit is $185. The monthly interest rate is 1%. The customer will pay in 30 days if they do not default. What is the break-even default percent?

• A) 3.8%
• B) 16.1%
• C) 17.0%
• D) 17.3%
• E) 18.4%

---

Definitions:

Feedback Loops

Systems or processes where the output or result impacts or influences the input or action in a cycle, important in system regulation and learning.

Homeostasis

Homeostasis is the property of a system, such as the human body, to regulate its internal environment to maintain a stable, constant condition in response to changes in the external environment.

Hierarchical Disengagements

The process of detaching or withdrawing from levels of a structured order or authority system.

Primary Attachments

The initial deep and enduring emotional bonds formed in early childhood, particularly between infants and their caregivers.