Q17. Fast Turnstiles

\fFast Turnstiles Company is evaluating the extension of credit to a new group ofcustomers. Although these customers will proVIde $486000 In additional credit sales. 12 percent are likelyto be uncollectiole The company will also Incur $17,800 In additional collection expense. Production and marketing costs representTE percent of sales. The firm Is In a 35 percenttax bracket and has a receivables turnover of four times. No other asset buildup will he required to sewice the new customers. The firm has a 12 percent desired return. 3-1. calculate tl'IE' Incremental Income after tEIXES. Incremental income aertaxes a-2. Calculate the return on Incremental Investment. Note: Input your answer as a percent rounded to 2 decimal places. Retum on incremental investment _a a-3. Should Fast Turnstiles Company.f extend credit to these customers? '1 R.) YES '1 ;_,- No Ia-1. Calculate the incremental Income attertaxes if15 percent of the new sales prove to be uncollectlble. Incremental income aftertaxes