Problem 7-20 Credit policy decision with changing variables (L07-4) Slow Roll Drum Con 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. No other asset buldup will be required to service the new customers. The firm has a 8 percent desired return Assume the average collection period is 72 days a. Compute the return on incremental investment (Input your answers percent rounded to 2 decimal places. Uw 360-day year) Habari nantal verant b. Should credit be extended to the new group of customers? ONO Yes Problem 7-22 Credit policy decision with changing variables [LO7-4) Dome Metals has credit sales of $504,000 yearly with credit terms of net 60 days, which is also the average collection period Dome does not offer a discount for early payment, so its customers take the full 60 days to pay a. What is the average receivables balance (Use o 360-day year.) 6 Average receivables balance b. What is the receivables tumover? (Use a 360-dey year) Recalable turnover times