M8-1 evaluating the decision to extend credit [lo 8-1 nutty productions inc. generated service revenue of $48,000 and income from operations of $19,000. the company estimates that, had it extended credit it would have instead generated $87,000 of service revenue, but it would have incurred $34,000 of additional expenses for wages and bad debts. 1-a. using these estimates, calculate the amount by which income from operations would increase (decrease) income from operations by 1-b. should the company extend credit? yes no

The management of a supermarket wants to adopt a new promotional policy of giving a free gift to every customer who spends > a certain amount per visit at this supermarket. the expectation of the management is that after this promotional policy is advertised, the expenditures for all customers at this supermarket will be normally distributed with a mean of $95 and a standard deviation of $20. if the management wants to give free gifts to at most 10% of the customers, what should the amount be above which a customer would receive a free gift?