Bilbo Bags & Things makes fashionable handbags. They are considering extending trade credit to some customers previously considered poor risks. The following estimations are made for this new customer base:

• Sales would increase by $100,000 if credit is extended to these new customers.
• Production and selling costs will be 80% of sales.
• All sales will be on credit, and 10% of them will prove to be uncollectible.
• Additional collection costs will be 5% of sales, and
• Customer Service costs will be 3% of Sales.
• The firm is in the 20 percent tax bracket.

What is the incremental income after taxes?

a). 2,000

b). 80,000

c). 1,600

d). 100,000