Your Company Is Considering Granting Credit to a New Customer

question 32

Multiple Choice

Your company is considering granting credit to a new customer. The price per unit is $165 and the variable cost per unit is $150. The monthly interest rate is 0.8%. The customer will pay in 30 days if he does not default. If the customer does not default, he will buy one unit every month forever. What is the break-even default percent?

• A) 3.7%
• B) 8.0%
• C) 61.5%
• D) 88.0%
• E) 92.0%

---

Definitions:

Upselling

A sales technique where a seller invites the customer to purchase more expensive items, upgrades, or other add-ons in an attempt to make a more profitable sale.

Analytical CRM

A type of Customer Relationship Management (CRM) focused on capturing, interpreting, and analyzing customer data to improve decision-making and customer relationships.

Customer Behavior

The study of how individual customers, groups or organizations select, buy, use, and dispose of goods, services, ideas, or experiences.

BI

Business Intelligence, the strategies and technologies used by enterprises for data analysis of business information.