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You are considering investing in Dakota s Security Services. You have been able to locate the following information on the firm: total assets are $
You are considering investing in Dakotas Security Services. You have been able to locate the following information on the firm: total assets are $ million, accounts receivable are $ million, ACP is days, net income is $ million, and debttoequity is times. All sales are on credit. Dakotas is considering loosening its credit policy such that ACP will increase to days. The change is expected to increase credit sales by percent. Any change in accounts receivable will be offset with a change in debt. No other balance sheet changes are expected.
Dakotas profit margin will remain unchanged. How will this change in accounts receivable policyaffect Dakotas net income, total asset turnover, equity multiplier, ROA, and ROE?
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