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RM8,000 for the firm? Question 10 Trusted Bhd is a well-known and reputable supplier of electrical components to manufacturers of electrical goods. The firm is
RM8,000 for the firm? Question 10 Trusted Bhd is a well-known and reputable supplier of electrical components to manufacturers of electrical goods. The firm is currently deciding whether to expand its sales to manufacturers in Thailand. While the firm expects an additional RM10 million in sales, if it enters this market, it also knows that 10% of its sales will ultimately be uncollectible. In addition, collection costs will be 3% on all new sales, while production and selling costs will be 70% of sales. Trusted Bhd's tax rate is 25%. Required: (b) If Trusted Bhd's accounts receivable turns over five times per year, what will its additional investment in accounts receivable be, and what will the firm earn as an after-tax return on the investment
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