1.ABC Corporation is a manufacturer of car parts which they distribute domestically.They are considering whether it expand into the global markets.While they expect an additional $2 million in sales from this venture, they also know that 15% of the sales will not be collected.Also, collection costs will be 2% on all new sales and their production and selling costs are 80% of sales.They have a tax rate of 30%

a.Calculate ABC Corporation's additional net profit

b.If they can turn their receivables over 4 times/year, what will its additional investment in accounts receivable be and what will the firm earn as an after-tax return on the investment?

c.ABC Corporation's top level management requires a 10% return on any new investment.Should they enter into this new venture?