What Credit Decision Is Appropriate for a Potential Customer That

question 59

Multiple Choice

What credit decision is appropriate for a potential customer that offers a 75% chance of paying on a $10,000 sale which has an 80% cost?

• A) Grant credit since the expected profit is $3,200.
• B) Grant credit since the expected profit is $800.
• C) Refuse credit since the expected profit is negative.
• D) Refuse credit since the expected loss is zero.

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