Global Services is considering a promotional campaign that will increase annual credit sales by $470,000. The company will require investments in accounts receivable, inventory, and plant and equipment. The turnover for each is as follows: Accounts receivable Inventory Plant and equipment 5 times 10 times 4 times All $470,000 of the sales will be collectible. However, collection costs will be 3 percent of sales, and production and selling costs will be 76 percent of sales. The cost to carry inventory will be 10 percent of inventory. Depreciation expense on plant and equipment will be 20 percent of plant and equipment. The tax rate is 35 percent. a. Compute the investments in accounts receivable, inventory, and plant and equipment based on the turnover ratios. Add the three together. Answer is complete and correct. Accounts receivable $ 94,000 47,000 Inventory Plant and equipment Total Investment 117,500 258,500 $ b. Compute the accounts receivable collection costs and production and selling costs and then add the two figures together. Answer is complete and correct. Collection cost Production and selling costs Total collection, production, and selling costs 14,100 357,200 371,300 $ c. Compute the costs of carrying inventory. Answer is complete and correct. Cost of carrying inventory $ 4,700 d. Compute the depreciation expense on new plant and equipment. Answer is complete and correct. Depreciation expense 23,500 e. Compute the total of all costs from parts b through d. Answer is complete and correct. Total costs $ 399,500 f. Compute income after taxes. Answer is complete and correct. Income after taxes $ 45,825 g-1. What is the aftertax rate of return? (Input your answer as a percent rounded to 2 decimal places.) Answer is not complete. Aftertax rate of return % g-2. If the firm has a required return on investment of 12 percent, should it undertake the promotional campaign described throughout this problem? Yes No