$3\mathrm{.}3$

REQUIRED

Use the information provided below to calculate the percentage return on sales $($expressed to

two decimal places$).(5$ marks$)$

INFORMATION

Selenite Limited intends entering a new market and market research has revealed that its sales would

increase by $20000$ units if the product is sold on credit. The cost price of the product it intends selling to this

market is R$80$ per unit and a profit mark$-$up of $40\%$ would be applied. A provision for bad debts of $14\%$ of the

sales would be made. Collection costs on the new accounts are estimated at $5\mathrm{.}5\%$ of sales. The tax rate of

the company is $27\%.$