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ABC has the opportunity to increase annual sales by P 1 , 0 0 0 , 0 0 0 by adopting a more looser credit

ABC has the opportunity to increase annual sales by P1,000,000 by adopting a more looser credit policy. It is estimated that bad debts expense would be 15% and collection cost is 5%. If the variable product and variable selling cost is 60% and 10% respectively, what will be the effect of this opportunity on net income?

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