12. Henderson Office Supply is considening a more liberal credit policy to incresse sales, but expects that 6 percent of the new accounts will be uncollectible. Collection costs are 4 percent of new sales, production and selling costs are 77 percent, and the accounts receivable tunover is four times. Assume income taxes of 35 percent and an increase in sales of $68,000. No other asset buildup wil be required to service the new accounts. a. What additional investment in accounts receivable is needed to support this seles expansion? Incremental accounts reoarvahla b. What woud be Henderson's incremental aftertax relurn an investment? (Input your answer as a percent rounded to 2 decimal places. Re.urn on incrermental investment c. Should Henderson liberalize credit ifa 12 percent aftertax return on investment ia required? Yes No Assume that Honderson also needs to incroase its level of ietory to support new sales and that the inventory turnaver is two times. d. What would be the totel Incrementel Investment in eccounts receveble and inventory needed to support e $68,000 Increese in seles? neeced to e in seles? Tote nremenial nvestrent e. Given the income determined in part b and the investment determined in part d, should Henderson extend more liberal credil tems? Yes No eBook &Resources