Gerald estimates the expected revenue stream against the expected costs for his customers and finds that for some of the customers the net present value is negative.Gerald should consider:
A)Quitting his job.
B)Working harder on those customers.
C)Using more advertising.
D)Firing those customers.

Question

Quizplus · Accepted Answer

If the net present value is negative for certain customers, it means that Gerald is losing money by doing business with them. In this case, it would be best for Gerald to let go of these customers and focus on the ones that are generating a positive net present value. By doing this, he can optimize his business and increase profitability.

Gerald Estimates the Expected Revenue Stream Against the Expected Costs