Jomal Corporation Expects to Receive $2,300 Along with Costs of $1,800

question 20

Multiple Choice

Jomal Corporation expects to receive $2,300 along with costs of $1,800 on each non-delinquent sale on credit.The probability of collection is 85%.Determine whether credit should be extended.

• A)Extend credit - net benefit of $155
• B)Extend credit - net benefit of $80
• C)Do not extend credit - net detriment of $155
• D)Do not extend credit - net detriment of $80

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Definitions:

Investment Project

A planned endeavour to invest capital in assets with the expectation of generating returns over time.

Gross Private Domestic

The total value of all goods and services produced within a country by the private sector during a specific time period, excluding net income from foreign investments.

Investment

The allocation of resources, usually financial, into assets or projects expected to yield profits or generate growth over time.

Corporate Stock

Equity securities issued by corporations to raise capital, representing ownership interests in the company.