Ethel, the CFO of Outward Bound Camping Supplies is investigating why sales have recently begun to slow. She knows a few new competitors have moved into the industry and has heard they are offering customers more attractive credit terms. Outward Bound has been offering the same credit terms for the last two decades, so perhaps it may be time to reassess things Ethel discusses the proposition with the sales and marketing department, and they believe extending credit could lead to $342.000 in additional credit sales. However, the accounting department pointed out that 13% of these new sales will likely be uncollectable, and it would incur $17,100 in additional collection expenses, since they would have to hire a part-time employee. No other asset buildup will be required to service the new customers, Other financial information: Production and marketing expenses represent 73% of sales Accounts receivable turnover is 5x Management has a 17% desired return on investment TASKS al Should Ethelrecommend extending the credit terms? d) Would Ethel's recommendation be the same it 16% of the new sales prove to be uncollectable? a) Calculate the return on incremental investment if the receivables turnover drops to 1.8x and 13% of the accounts are uncollectable TEMPLATE for part A: Added sales Accounts uncollectible Annual incremental revenue Collection costs Production and selling costs Annual income before taxes