A Customer Has Ordered Goods with a Value of $2000

question 29

Multiple Choice

A customer has ordered goods with a value of $2000. The production cost is $1800. 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 p(2000 - 1800) - (1 - p)(1800) = 0; p = 0.90

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Definitions:

Anticipation of Pain

The psychological and physiological response to expecting pain, which can modify perception and pain management strategies.

Lateral Prefrontal Cortex

A part of the frontal lobe of the brain involved in executive functions like decision-making, planning, and inhibiting inappropriate behaviors.

Anterior Cingulate Cortex

A part of the brain involved in a wide range of functions including emotion regulation, decision making, and impulse control.