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Henderson Office Supply is considering a more liberal credit policy to increase sales but expects that 7 percent of the new accounts will be uncollectible.

Henderson Office Supply is considering a more liberal credit policy to increase sales but expects that 7 percent of the new accounts will be uncollectible. Collection costs are 5 percent of new sales, production and selling costs are 80 percent, and accounts receivable turnover is four times. Assume income taxes of 30 percent and an increase in sales of $63,000. No other asset buildup will be required to service the new accounts.
What additional investment in accounts

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