Samana Corporation Expects to Receive $1,500 Along with Costs of $1,000

question 64

Multiple Choice

Samana Corporation expects to receive $1,500 along with costs of $1,000 on each non-delinquent sale on credit.The probability of collection is 60%.Determine whether credit should be extended.

• A)Extend credit - net benefit of $100
• B)Extend credit - net benefit of $0
• C)Do not extend credit - net detriment of $100
• D)Do not extend credit - net detriment of $200 p x PV(REV - COST) - (1-p) x PV(COST)

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Definitions:

Dry Climate

A type of climate characterized by low precipitation levels, leading to desert landscapes and sparse vegetation.

Isotopes

Variations of a chemical element that have the same number of protons but different numbers of neutrons in their nuclei.

Ancient Rock

Rock formations dating back millions of years, often providing information on the Earth's geological and evolutionary history.

Prehistoric Cultural Sites

Locations that provide archaeological evidence of human activity and habitation before recorded history or the advent of written language.