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Western Co. is a highly successful supplier of leather to manufacturers of leather goods. Western Co. is considering expanding into the luxury auto seat
Western Co. is a highly successful supplier of leather to manufacturers of leather goods. Western Co. is considering expanding into the luxury auto seat market. It is estimated that selling leather to auto manufacturers will bring additional annual sales of $700,000, but that 12% of those accounts will be uncollectible. The cost of conditioning and selling the leather is 70% of sales Compute the incremental income before taxes b. What will Western Co's incremental return on sales be if these new credit customers are accepted? c. If the receivables turnover 5 times a year, what will Western Co's incremental return on new average investment be?
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