The two most critical questions in the lending industry are: 1) How risky is the borrower? 2) Given the borrower's risk, should we lend him/her? The answer to the first question determines the interest rate the borrower would have. Interest rate measures among other things (such as time value of money) the riskness of the borrower, i.e. the riskier the borrower, the higher the interest rate. With interest rate in mind, we can then determine if the borrower is eligible for the loan.
Employee turnover refers to the percentage of workers who leave an organization and are replaced by new employees. It is very costly for organizations, where costs include but not limited to: separation, vacancy, recruitment, training and replacement. On average, organizations invest between four weeks and three months training new employees. This investment would be a loss for the company if the new employee decided to leave the first year. Furthermore, organizations such as consulting firms would suffer from deterioration in customer satisfaction due to regular changes in Account Reps and/or Consultants that would lead to loss of businesses with clients.