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Crisps has received an order for 11500 bags of potato chips from BigBag. Crisps views BigBag...

Crisps has received an order for 11500 bags of potato chips from BigBag. Crisps views BigBag to be a long-term customer and believes they will continue to place the same order year after year forever. Crisps sells its large bags of potato chips for $2.10 each, and calculates its internal cost for the product at $0.85 each.

Market research estimates that there is a 37% chance that BigBag will pay in full what it owes. Crisps uses a discount rate of 6.95% for all NPV analysis.

Based on this information, calculate the NPV of this credit decision?

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SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

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