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Fast Turnstiles Company is evaluating the extension of credit to a new group of customers. Although these customers will provide $468,000 in additional credit sales,

Fast Turnstiles Company is evaluating the extension of credit to a new group of customers. Although these customers will provide $468,000 in additional credit sales, 11 percent are likely to be uncollectible. The company will also incur $17,700 in additional collection expense. Production and marketing costs represent 76 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 10 percent desired return

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