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the new credit manager of Kays Dpartment store plans toliberalize the firms credit policy.

the new credit manager of Kays Dpartment store plans toliberalize the firms credit policy.

the new credit manager of Kays Dpartment store plans toliberalize the firms credit policy.The firm currently generatescredit sales of $575,000 annually. te more lenient the creditpolicy is expected to produce credit sales of $750,000. The baddebt losses on additional sales are projected to be 5% despit anyadditional $15,000 collection expenditure.The new manageranticipates production and selling costs other than additional baddebt and collection expenses will remain at the 85% level. The firmis in the 34%tax bracket.if the firm maintains its recievablesturnover 10 times,how much will the recievables balanceincrease,what would be Kays incremental after tax return oninvestment? Assuming additional inventory of $35,000 is required tosupport the additional sales, compute the after tax return oninvestment. Please show work so I will understand better..

Abhinav 02-Dec-2019

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