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MENT OF WORKIN As a part of the strategy to increase sales and profits, the sales manager of a company proposes to sell goods to a group of new customers with 10% risk of non-payment. This group would require one and a halfmonths credit and is likely to increase sales by 1,00,000 p.a. Production and Selling expenses amount to 80% of sales and the income tax rate is 50%. The company's minimum required rate of return (after tax) is 25%. Should the sales manager's proposal be accepted? Also find the degree of risk of non-payment that the company should be willing to assume if the required rate of return (after tax) were (1) 30%, (1) 40% and (ii ) 60%