Business, 30.03.2020 21:26 hajoshh

Fast Turnstiles Co. is evaluating the extension of credit to a new group of customers. Although these customers will provide $540,000 in additional credit sales, 15 percent are likely to be uncollectible. The company will also incur $18,100 in additional collection expense. Production and marketing costs represent 72 percent of sales. The firm is in a 30 percent tax bracket and has a receivables turnover of five times. No other asset buildup will be required to service the new customers. The firm has a 12 percent desired return. a-1. Calculate the incremental income after taxes.

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Fast Turnstiles Co. is evaluating the extension of credit to a new group of customers. Although thes...

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