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:

Schizophrenia

A chronic and severe mental disorder that affects how a person thinks, feels, and behaves, leading to psychotic episodes.

Substance Use Disorder

A complex condition characterized by uncontrolled use of substances despite harmful consequences, leading to significant impairment or distress.

Intelligence

The ability to learn, understand, and apply knowledge, solve problems, and adapt to new situations.

Fear

An emotional response to an immediate threat or danger, characterized by feelings of anxiousness and apprehension.