Johnson Electronics is considering extending trade credit to some customers previously considered poor risks. Sales would increa
se by $230,000 if credit is extended to these new customers. Of the new accounts receivable generated, 5 percent will prove to be uncollectible. Additional collection costs will be 2 percent of sales, and production and selling costs will be 71 percent of sales. The firm is in the 20 percent tax bracket. a. Compute the incremental income after taxes.
b. What will Johnson’s incremental return on sales be if these new credit customers are accepted? (Input your answer as a percent rounded to 2 decimal places.)
c. If the accounts receivable turnover ratio is 3 to 1, and no other asset buildup is needed to serve the new customers, what will Johnson’s incremental return on new average investment be? (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)
Answer: One way in which society has not benefited from the increasing police professionalism is because of the increase, community relations between civilians and police suffered despite the removal of political involvement.
I would say the C. is the correct answer, because if the 3D Printer prints the pieces faster, the games are sold more frequently. I hope this helps, and that it makes sense to you.
