Fast Turnstiles Co. is evaluating the extension of credit to a new group of customers. Although these customers will provide $540,000 in additional credit sales, 15 percent are likely to be uncollectible. The company will also incur $18,100 in additional collection expense. Production and marketing costs represent 72 percent of sales. The firm is in a 30 percent tax bracket and has a receivables turnover of five times. No other asset buildup will be required to service the new customers. The firm has a 12 percent desired return.

b-1.Calculate the incremental income after taxes if 18 percent of the new sales prove to be uncollectible.

b-2.Calculate the return on incremental investment if 18 percent of the new sales prove to be uncollectible.(Input your answer as a percent rounded to 2 decimal places.)

c-1.Calculate the return on incremental investment if the receivables turnover drops to 1.6 and 15 percent of the accounts are uncollectible.(Input your answer as a percent rounded to 2 decimal places.)