What must the probability of payment be before Berkshire would adopt the policy?

The Decision to Grant Credit: Risk and Information Berkshire Sports, Inc., operates a mail-order running-shoe business. Management is considering dropping its policy of no credit. The credit policy under consideration by Berkshire follows:No CreditCreditPrice per unit$35$40Cost per unit$25$32Quantity sold2,0003,000Probability of payment100%85%Credit period01Discount rate03%a. Should Berkshire offer credit to its customers?b. What must the probability of payment be before Berkshire would adopt the policy?

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