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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Definitions:

Emission

Discharge; accumulation of semen in the urethra prior to ejaculation. A nocturnal emission is a discharge of semen while asleep.

Ejaculation

The discharge of semen from the male reproductive tract as a result of sexual arousal.

Seminiferous Tubules

Narrow, coiled tubules within the testes where sperm are produced via the process of spermatogenesis.

Ductus Deferens

A tube that carries sperm from the testicles to the urethra, facilitating the transport of sperm during ejaculation.