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Ajax Predicts That If a Customer Pays on the First

question 88

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Ajax predicts that if a customer pays on the first sale, it is assured that it is a reliable customer.As such, it expects that customer to generate a net profit of $350 per year for 12 years.Ajax calculates present value with a 15% rate of return.There is a 90% probability that Ajax will secure a reliable customer.However, if the customer defaults, Ajax will have to incur a loss of $500.Determine the expected benefit if credit is granted.

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Definitions:

Colored Women

An outdated term historically used to refer to women of non-white or mixed racial heritage, now considered derogatory and no longer in appropriate use.

Talented Tenth

A term popularized by W.E.B. Du Bois referring to the supposed ten percent of African Americans who could lead the race to greater advancements through higher education and intellectual achievement.

Niagara Movement

An early 20th-century African-American civil rights group advocating for political, civil, and social rights, precursor to the NAACP.

Educated Blacks

Refers to African Americans who have attained formal education, particularly during times when access to education for Blacks was severely restricted.

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