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Lyman Company has the opportunity to increase annual credit sales $90,000 by selling to a new, riskier group of customers. The expenses of collecting credit

Lyman Company has the opportunity to increase annual credit sales $90,000 by selling to a new, riskier group of customers. The expenses of collecting credit sales are expected to be 15 percent of credit sales. The company's manufacturing and selling expenses are projected at 70% of sales, and its effective income tax rate is 50%. If Lyman accepts this sales opportunity, its after-tax profits would increase by an estimated: $6,750. $12,150. Some amount other than these choices. $7,750. $7,950.

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