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Problem 7 - 2 0 ( Algo ) Credit policy decision with changing variables [ LO 7 - 4 ] Slow Roll Drum Company is
Problem Algo Credit policy decision with changing variables LO
Slow Roll Drum Company is evaluating the extension of credit to a new group of customers. Although these customers will provide $ in additional credit sales, percent are likely to be uncollectible. The company will also incur $ in additional collection expense. Production and marketing costs represent percent of sales. The firm is in a percent tax bracket. No other asset buildup will be required to service the new customers. The firm has a percent desired return. Assume the average collection period is days.
a Compute the return on incremental investment.
Note: Input your answer as a percent rounded to decimal places. Use a day year.
Return on incremental investment
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