Which of the following credit decisions appears correct for a customer that intends to order $1,000 of goods annually that have a 20% profit margin if the probability of default is 20% and the discount rate is 10%?
A) Reject because expected profit equals $0
B) Accept because expected profit equals $1,440
C) Reject because expected loss equals $320
D) Accept because expected profit equals $3,200
Ans: B) Accept because expected profit equals $1,440
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Which of the following is not an advantage of decentralization?
A) provides training B) frees top management time C) works to achieve goal congruence D) supports the use of expert knowledge
Which of the following is a true statement?
A. Meals are never deductible as a business expense. B. An employer can only deduct half of any meals provided to employees C. The cost of business meals must be reasonable D. A taxpayer can only deduct a meal for a client if business is discussed during the meal. E. None of these is true.