Johnson Electronics is considering extending trade credit to some customers previously considered poor risks. Sales would increase by $230,000 if credit is extended to these new customers. Of the new accounts receivable generated, 5 percent will prove to be uncollectible. Additional collection costs will be 2 percent of sales, and production and selling costs will be 71 percent of sales. The firm is in the 20 percent tax bracket. a. Compute the incremental income after taxes.

b. What will Johnsons incremental return on sales be if these new credit customers are accepted? (Input your answer as a percent rounded to 2 decimal places.) c. If the accounts receivable turnover ratio is 3 to 1, and no other asset buildup is needed to serve the new customers, what will Johnsons incremental return on new average investment be? (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)

Johnson Electronics is considering extending trade credit to some customers previously considered poor risks. Sales would increase try $230,000 if credit is extended to these new customers of the new accounts reactivate generated 5 percent will prove to be costs will be 2 percentage of sales, and production costs will be 71 percent of safes The firm is in the 20 percent of bracket Compute the incremental income after taxes what Johnson's incremental return on sales be If these new credit. customers are accepted? (Input your answer us a percent rounded to 2 decimal places If the accounts receivable turnover ratio is 3 to 1. and no other asset buildup is needed to serve the new customers, what will customers, what will increment return on new average investment be? (Do not round intermediate calculations, input your answer as a percent rounded to 2 decimal places.)