ABC Corporation is evaluating extending credit to a new group of customers. Although these customers will provide $250,000 in additional credit sales, 15 percent are likely to be uncollectible. The company will incur $19,000 in additional collection expenses. Production and marketing expenses represent 80 percent of sales. The company has a receivables turnover of five times. No other asset buildup will be required to service the new customers. The firm has a 15 percent desired return on investment 1 X A B IT: EE * a) Should they extend credit to these customers? (5 marks) b) Should credit be extended if 18 percent of the new sales prove uncollectible? (2 marks) Should credit be extended if the receivables tumover drops to 1.5 and 15 percent of the accounts are uncollectible (as was the case in part a)