A1. (NPV of Granting Credit)
Corporate Financial Management (3rd Edition)
Emery, Douglas R., Finnerty, John D., & Stowe, John D. (2007)
Individual assignment: Text Problem Set
Chapter Problems
A1. (NPV of granting credit) A credit sale of $15,000 has a 95% probability of being repaid in two months and a 5% probability of a complete default. If the investment in the sale is $12,000 and the opportunity cost of funds is 15% per year, what is the NPV of granting credit?
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