What is the maximum average amount per unit

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Question content area top Part 1 Little Runabout Inc. makes small trailers for lightminusduty towing behind SUVs and small pickup trucks. Its trailers typically sell for $2,500. Many of its customers have asked for credit terms to aid in purchasing the trailers. The firm's finance department has estimated the following profile for its lightminusduty trailers and customer base: Annual sales: 12,000 trailers Annual production costs per trailer: $1,500 Lost sales if credit is not provided for customers: 2,000 trailers Default rate if all customers purchase on credit: 3.00% What is the dollar value of bad debts the firm expects to accumulate over a year? Get the instant assignment help. Given this amount, what is the maximum average amount per unit sold that the firm should spend on credit screening?

Reference no: EM133922318

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