What is the amount of the net savings from subscribing to the credit agency?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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The Cycle Shoppe has decided to offer credit to its customers during the spring selling season. Sales are expected to be 330 bicycles. The average cost to the shop of a bicycle is $300. The owner knows that only 93 percent of the customers will be able to make their payments. To identify the remaining 7 percent, she is considering subscribing to a credit agency. The initial charge for this service is $540, with an additional charge of $6 per individual report. What is the amount of the net savings from subscribing to the credit agency?

 

A. $3,790

B. $3,920

C. $4,080

D. $4,410

E. $4,950

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