Engi Sola Corp. Manufactures solar engines for tractor trailers. Given the fuel savings available, new orders for 125 units have been made by customers requesting credit. The variable cost is $9,700 per unit, and the credit price is $11,100 each. Credit is extended for one period. The required return is 1.9% per period. If Engi Sola extends credit, it expects that 30% of the customers will be repeat customers and place the same order every period forever, and the remaining customers will be one-time orders.

The net present value (NPV) of the decision to grant credit is $2,938,157.89.

Explanation:

Note: This question is not complete. The complete question is therefore provided before answering the question as follows:

Engi Sola Corp. Manufactures solar engines for tractor trailers. Given the fuel savings available, new orders for 125 units have been made by customers requesting credit. The variable cost is $9,700 per unit, and the credit price is $11,100 each. Credit is extended for one period. The required return is 1.9% per period. If Engi Sola extends credit, it expects that 30% of the customers will be repeat customers and place the same order every period forever, and the remaining customers will be one-time orders.

Calculate the NPV of the decision to grant credit.

The explanation of the answer is now given as follows:

Number of new orders = 125 units

Percentage of repeat order = 30%

Number of order that will be repeated forever = Number of new orders * Percentage of repeat order = 125 * 30% = 37.50 units

Credit price per unit = $11,100

Variable cost per unit = $9,700

Contribution margin per unit = Credit price per unit - Variable cost per unit = $11,100 - $9,700 = $1,400

Total contribution for all new order = Number of new orders * Contribution margin per unit = 125 * $1,400 = $175,000

Total contribution margin for order that will be repeated forever = Contribution margin per unit * Number of order that will be repeated forever = $1,400 * 37.50 = $52,500

Net present value (NPV) of total contribution margin for order that will be repeated forever = Total contribution margin for repeated order forever / Required return = $52,500 / 1.9% = 2,763,157.89

Net present value (NPV) of the decision to grant credit = Total contribution for all new order + NPV of total contribution margin for order that will be repeated forever = $175,000 + 2,763,157.89 = $2,938,157.89

Therefore, the net present value (NPV) of the decision to grant credit is $2,938,157.89.

a) both were commissioned explorers

the correct answer is - no.

winnipeg, canada, is not further away from the equator than moscow, russia, in fact moscow is the city that is further away from the equator. moscow is on a latitude of 55.7558° north, while winnipeg is on a latitude of 49.8951° north, thus putting moscow by 5.8607° further away from the equator than winnipeg is.