Assume All Sales Are One-Time Credit Sales with a Probability

question 29

Multiple Choice

Assume all sales are one-time credit sales with a probability of collection of 96 percent. The variable cost per unit is $1.67, the sales price per unit is $4.99, and the monthly interest rate is 1.35 percent. What is the NPV of a credit sale of one item?

• A) $3.18
• B) $2.87
• C) $3.38
• D) $2.92
• E) $3.06

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