Determine the Break-Even Probability of Collection for the Following Seller

question 82

Essay

Determine the break-even probability of collection for the following seller: $2,000 average invoice,64% costs,1% per month opportunity cost of capital.Assume that production costs were just paid and that receivables are outstanding an average of 2 months.

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Definitions:

Prototype

In person perception, an abstraction that represents the “typical” or quintessential instance of a class or group.

Implicit Personality Theory

A set of unstated assumptions about which personality traits are correlated with one another.

Stereotype

A generalized belief or assumption about the characteristics of a particular group or category of people.

Availability Heuristic

A mental shortcut that relies on immediate examples that come to a given person's mind when evaluating a specific topic, concept, method, or decision.