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

question 97

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 p x PV(REV - COST) - (1-p) x PV(COST)

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Definitions:

Bell Shaped

Describing a graphical representation of data that exhibits a symmetric distribution around a central peak, resembling the shape of a bell.

Ordered Data Set

A collection of objects or values arranged in a sequence following a specific order, usually numerical or alphabetical.

Observations

Individual data points or measurements collected during a study or experiment.

Histogram

A graphical representation of the distribution of numerical data, showing the frequency of data points within successive intervals.