Considering extending trade credit

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Kevin’s Wholesale is considering extending trade credit to some customers previously considered poor risks. Sales would increase by $350,000 if credit is extended to these new customers. Of the new accounts receivable generated, 15 % will be uncollectible. Additional collection costs are estimated to be 2% of sales. Production and selling costs are 70% of sales. The firm is in the 35% tax bracket. Compute the Incremental Income After Taxes if these new credit customers are accepted.

Reference no: EM131021583

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