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Mimms Electronics is considering extending trade credit to some customers previously considered poor risks. Sales would increase by $150,000 if credit is extended to these
Mimms Electronics is considering extending trade credit to some customers previously considered poor risks. Sales would increase by $150,000 if credit is extended to these new customers with a return on sales of 12.35%.If theturnover ratio is 3 to 1 between sales and accounts receivableand no other asset buildup is needed to serve the new customers, what will Johnson'sexpected return on investment be?
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