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 $2$ percent of new sales, production and selling costs are $79$ percent, and accounts receivable

turnover is two times. Assume income taxes of $30$ percent and an increase in sales of $$81,000.$ No other asset buildup will be required

to service the new accounts.

a$.$ What additional investment in accounts receivable is needed to support this sales expansion?

b$.$ What would be Henderson's incremental aftertax return on investment?

Note: Input your answer as a percent rounded to $2$ decimal places.

Return on incremental investment

c$.$ Should Henderson liberalize credit if a $14$ percent aftertax return on investment is required?