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Problem 7-19 (Algo) Credit policy decision with changing variables [LO7-4] Fast Turnstiles Company is evaluating the extension of credit to a new group of customers.

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Problem 7-19 (Algo) Credit policy decision with changing variables [LO7-4] Fast Turnstiles Company is evaluating the extension of credit to a new group of customers. Although these customers will provide $378,000 in additional credit sales, 15 percent are likely to be uncollectible. The company will also incur $17,300 in additional collection expense. Production and marketing costs represent 70 percent of sales. The firm is in a 30 percent tax bracket and has a receivables turnover of four times. No other asset buildup will be required to service the new customers. The firm has a 8 percent desired return. a-1. Calculate the incremental income after taxes. a-2. Calculate the return on incremental investment. Note: Input your answer as a percent rounded to 2 decimal places

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