Zozan Corp. manufactures Hydrogen engines automobiles. Recently 450 new ord requesting credit. The variable cost is $35,000 per unit, and the credit price is $43, extended for one period, and based on historical experience, payments for 20% c collected. The required return is 4% per period. Assuming a repeat customer, should it be filled by the firm? The customer will not
Zozan Corp. manufactures Hydrogen engines automobiles. Recently 450 new ord requesting credit. The variable cost is $35,000 per unit, and the credit price is $43, extended for one period, and based on historical experience, payments for 20% c collected. The required return is 4% per period. Assuming a repeat customer, should it be filled by the firm? The customer will not
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
Section: Chapter Questions
Problem 1PS
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Step 1: Define=NPV of credit policy
Net present value is difference between the present value of cash flow and initial investment made by company in credit policy.
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