How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask SteveS Your Own Question
SteveS, MBA
Category: Homework
Satisfied Customers: 453
Experience:  MBA from Top 5 US Business School, Tutoring Experience for Over Two Years
Type Your Homework Question Here...
SteveS is online now
A new question is answered every 9 seconds

Additional sales $80,000 Accounts uncollectible (9% of new

This answer was rated:

Additional sales $80,000
Accounts uncollectible (9% of new sales) $7,200
Annual incremental revenue $72,800
Collection costs (5% of new sales) $4,000
Production and selling costs (78% of new sales) $62,400
Annual income before taxes $6,400
Taxes (30%) $1,920
Annual incremental income after taxes $4,480

A What is the level of accounts receivable needed to support this sales expansion?

B What would be Collins’s incremental after tax return on investment?

C Should Collins liberalize credit if a 15 percent after tax return on investment is required? Assume Collins also needs to increase its level of inventory to support new sales and that inventory turnover is four times.

D What would be the total incremental investment in accounts receivable and inventory to support an $80,000 increase in sales?

E Given the income determined in part b and the investment determined in part d, should Collins extend more liberal credit terms?

You need to spend $3 to view this post. Add Funds to your account and buy credits.
SteveS and other Homework Specialists are ready to help you
Customer: replied 7 years ago.

thank you, XXXXX XXXXX is well I will be submitting additional requests



thanks again