Ali Storage Company Projects 800 Customers Next Year

question 49

Essay

Ali Storage Company projects 800 customers next year. Of these,600 have been profitable and have never defaulted on past obligations,while 200 have not been profitable. All of the unprofitable accounts are expected to default if given credit. Ali can pay $0.40 to an agency that will tell them whether a customer has been profitable. If Ali's price per unit is $10,and its cost per unit is $6,should they allow the credit check to be performed?
Assume a discount rate of 1%.

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Definitions:

Taking Pulse

The act of measuring the rate and rhythm of the heartbeats by palpating arteries, typically at the wrist or neck.

Zygomatic Arch

The bone that forms the prominence of the cheek, extending from the zygomatic bone to the temporal bone.

Lower Limb

Refers to the part of the body extending from the hip to the toes, inclusive of the thigh, knee, leg, ankle, and foot.

Upper Torso

The upper part of the human body, including the chest, shoulders, and back, housing vital organs such as the heart and lungs.