Locust Software sells computer training packages to its business customers at a price of $101. The cost of production (in present value terms) is $99. Locust sells its packages on terms of net 30 and estimates that about 7% of all orders will be uncollectible. An order comes in for 30 units. The interest rate is 1.3% per month. Required: a-1. Calculate the profit or loss if this is a one-time order and sale will not be made unless credit is extended a-2. Should the firm extend credit if this is a one-time order? b. What is the break-even probability of collection? c-1. Now suppose that if the customer pays this month's bill, they will place an identical order in each month indefinitely and can be safely assumed to pose no risk of default.Calculate the present value of the sale. c-2. Should credit be extended? d. What is the break-even probability of collection in the repeat-sales case? Complete this question by entering your answers in the tabs below. Req A1 A2 and Req C1 C2 and B D c-1. Now suppose that if the customer pays this month's bill, they will place an identical order in each month indefinitely and can be safely assumed to pose no risk of default.Calculate the present value of the sale. (Do not round intermediate calculations. Round your answer to 2 decimal places.) c-2. Should credit be extended? d. What is the break-even probability of collection in the repeat-sales case? (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.) Show less A c-1. Present value c-2. Should credit be extended? d. Break-even probability % < Req A1 A2 and B Req C1 C2 and D Locust Software sells computer training packages to its business customers at a price of $101. The cost of production (in present value terms) is $99. Locust sells its packages on terms of net 30 and estimates that about 7% of all orders will be uncollectible. An order comes in for 30 units. The interest rate is 1.3% per month. Required: a-1. Calculate the profit or loss if this is a one-time order and sale will not be made unless credit is extended a-2. Should the firm extend credit if this is a one-time order? b. What is the break-even probability of collection? c-1. Now suppose that if the customer pays this month's bill, they will place an identical order in each month indefinitely and can be safely assumed to pose no risk of default.Calculate the present value of the sale. c-2. Should credit be extended? d. What is the break-even probability of collection in the repeat-sales case? Complete this question by entering your answers in the tabs below. Req A1 A2 and Req C1 C2 and B D c-1. Now suppose that if the customer pays this month's bill, they will place an identical order in each month indefinitely and can be safely assumed to pose no risk of default.Calculate the present value of the sale. (Do not round intermediate calculations. Round your answer to 2 decimal places.) c-2. Should credit be extended? d. What is the break-even probability of collection in the repeat-sales case? (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.) Show less A c-1. Present value c-2. Should credit be extended? d. Break-even probability % < Req A1 A2 and B Req C1 C2 and D
Locust Software sells computer training packages to its business customers at a price of $101. The cost of production (in present value terms) is $99. Locust sells its packages on terms of net 30 and estimates that about 7% of all orders will be uncollectible. An order comes in for 30 units. The interest rate is 1.3% per month. Required: a-1. Calculate the profit or loss if this is a one-time order and sale will not be made unless credit is extended a-2. Should the firm extend credit if this is a one-time order? b. What is the break-even probability of collection? c-1. Now suppose that if the customer pays this month's bill, they will place an identical order in each month indefinitely and can be safely assumed to pose no risk of default.Calculate the present value of the sale. c-2. Should credit be extended? d. What is the break-even probability of collection in the repeat-sales case? Complete this question by entering your answers in the tabs below. Req A1 A2 and Req C1 C2 and B D c-1. Now suppose that if the customer pays this month's bill, they will place an identical order in each month indefinitely and can be safely assumed to pose no risk of default.Calculate the present value of the sale. (Do not round intermediate calculations. Round your answer to 2 decimal places.) c-2. Should credit be extended? d. What is the break-even probability of collection in the repeat-sales case? (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.) Show less A c-1. Present value c-2. Should credit be extended? d. Break-even probability % < Req A1 A2 and B Req C1 C2 and D Locust Software sells computer training packages to its business customers at a price of $101. The cost of production (in present value terms) is $99. Locust sells its packages on terms of net 30 and estimates that about 7% of all orders will be uncollectible. An order comes in for 30 units. The interest rate is 1.3% per month. Required: a-1. Calculate the profit or loss if this is a one-time order and sale will not be made unless credit is extended a-2. Should the firm extend credit if this is a one-time order? b. What is the break-even probability of collection? c-1. Now suppose that if the customer pays this month's bill, they will place an identical order in each month indefinitely and can be safely assumed to pose no risk of default.Calculate the present value of the sale. c-2. Should credit be extended? d. What is the break-even probability of collection in the repeat-sales case? Complete this question by entering your answers in the tabs below. Req A1 A2 and Req C1 C2 and B D c-1. Now suppose that if the customer pays this month's bill, they will place an identical order in each month indefinitely and can be safely assumed to pose no risk of default.Calculate the present value of the sale. (Do not round intermediate calculations. Round your answer to 2 decimal places.) c-2. Should credit be extended? d. What is the break-even probability of collection in the repeat-sales case? (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.) Show less A c-1. Present value c-2. Should credit be extended? d. Break-even probability % < Req A1 A2 and B Req C1 C2 and D
Chapter2: Building Blocks Of Managerial Accounting
Section: Chapter Questions
Problem 12EA: Markson and Sons leases a copy machine with terms that include a fixed fee each month of $500 plus a...
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I need the second Req please! Thank you.
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