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Question 26 - CMA 1290 1.30 - Accounts Receivable Management Lawson Company has the opportunity to increase annual sales $100,000 by selling to a
Question 26 - CMA 1290 1.30 - Accounts Receivable Management Lawson Company has the opportunity to increase annual sales $100,000 by selling to a new, riskier group of customers. Based on sales, the uncollectible expense is expected to be 15%, and collection costs will be 5%. The company's manufacturing and selling expenses are 70% of sales, and its effective tax rate is 40%. If Lawson accepts this opportunity, the company's after-tax profit will increase by A. $6,000. B. $10,000. C. $4,000. D. $9,000.
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