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TOLA MIG WUIK MUUD. MIS SHOWS WHIt is correct or incorrect 107 the work you have completed so far. It does not indicate completi Rets

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TOLA MIG WUIK MUUD. MIS SHOWS WHIt is correct or incorrect 107 the work you have completed so far. It does not indicate completi Rets Problem 7-22 Comiskey Fence Co. is evaluating extending credit to a new group of customers. Although these customers will provide $450,000 in additional credit sales, 10 percent are likely to be uncollectible. The company will incur $17,600 in additional collection expenses Production and marketing expenses represent 78 percent of sales. The company has a receivables turnover of five times. No other asset buildup will be required to service the new customers. The firm has a 16 percent desired return on investment 8-1. Calculate the incremental income before taxes from this new group of customers, Incremental income before taxes $36400 a-2. Calculate the return on incremental investment. (Round the final answer to 2 decimal place.) I Return on incremental investment 40.44 % Should Cominsky extend credit to these customers? Yes No 9 2

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