1- what is the amount of additional collection cost? 2-what is the profit of the new sales? 3-what is the percentage eeturn of the new sales? 4- what is the amount of the new investment in account receivable if the ccount receivable are turned over 4 times a year? 5-what is the return on investment, assuming that only new investment will be in account receivable?

Use the below information to answer the following FIVE questions (numbered 16 through 20). Tilak Company is thinking about extending trade credit to new customers. This will increase the annual sales by $440,000 if credit is extended to these customers. Of the new accounts receivable related to these sales, 7% will be uncollectible. Additional collection costs will be 5% of sales. Besides, production and selling costs will be 80% of sales. The company is in a 40% tax bracket