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Lyman Company has the opportunity to increase annual credit sales $120,000 by selling to a new, riskier group of customers. The expenses of collecting credit
Lyman Company has the opportunity to increase annual credit sales $120,000 by selling to a new, riskier group of customers. The expenses of collecting credit sales are expected to be 5 percent of credit sales. The company's manufacturing and selling expenses are projected at 80% of sales, and its effective tax rate is 20%. If Lyman accepts this opportunity, its after-tax profits would increase by an estimated:
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