I would like to have this assignment checked for accuracy please. Thank you Proposal #1 would extend...

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I would like to have this assignment checked for accuracyplease. Thank you
Proposal #1 would extend trade credit to some customersthat previously have been denied credit because they wereconsidered poor risks. Sales are projected to increaseby $120,000 per year if credit is extended to these new customers.Of the new accounts receivable generated, 6% are projected to beuncollectible. Additional collection costs are projected to be 5%of incremental sales, and production and selling costs areprojected to be 80% of sales. Your firm expects to pay a total of30% of its income after expenses in taxes.
Compute the incremental income after taxes that wouldresult from these projections:
Compute the incremental Return on Sales if these newcredit customers are accepted:
If the receivable turnoverratio is expected to be 4 to 1 and no other asset buildup is neededto serve the new customers…
Compute the additional investment in AccountsReceivable
Compute the incremental Return on NewInvestment
If your company requires a 20% Rate of Return onInvestment for all proposals, do the numbers suggest that tradecredit should be extended to these new customers?Explain.
Proposal #1
Dollars
Incremental Sales $120,000.00
Collection Cost (5% of Incremental Sales) $6,000.00 120,000.00 X 5% = $6,000.00
BadDebts (6% of account Receivables) -$7,200.00 120,000 X 6% = $7200.00
Production and Selling Cist(80% of Incremental Sales) -$96,000.00 120,000 X 80% = $96000.00
incremental Income Before Taxes $10,800.00 120,000.00-6000.00-7200.00-96,000 = 10800.00
Taxes@30%of Incremental Income -$3,240.00 10800.00 X 30% = $3240.00
Incremental Income after Taxes $7,560.00 Incrremental Income after Taxes

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I would like to have this assignment checked for accuracyplease. Thank youProposal #1 would extend trade credit to some customersthat previously have been denied credit because they wereconsidered poor risks. Sales are projected to increaseby $120,000 per year if credit is extended to these new customers.Of the new accounts receivable generated, 6% are projected to beuncollectible. Additional collection costs are projected to be 5%of incremental sales, and production and selling costs areprojected to be 80% of sales. Your firm expects to pay a total of30% of its income after expenses in taxes.Compute the incremental income after taxes that wouldresult from these projections:Compute the incremental Return on Sales if these newcredit customers are accepted:If the receivable turnoverratio is expected to be 4 to 1 and no other asset buildup is neededto serve the new customers…Compute the additional investment in AccountsReceivableCompute the incremental Return on NewInvestmentIf your company requires a 20% Rate of Return onInvestment for all proposals, do the numbers suggest that tradecredit should be extended to these new customers?Explain.Proposal #1DollarsIncremental Sales$120,000.00Collection Cost (5% of Incremental Sales)$6,000.00120,000.00 X 5% = $6,000.00BadDebts (6% of account Receivables)-$7,200.00120,000 X 6% = $7200.00Production and Selling Cist(80% of Incremental Sales)-$96,000.00120,000 X 80% = $96000.00incremental Income Before Taxes$10,800.00120,000.00-6000.00-7200.00-96,000 = 10800.00Taxes@30%of Incremental Income-$3,240.0010800.00 X 30% = $3240.00Incremental Income after Taxes$7,560.00Incrremental Income after Taxes

Proposal #1
	Dollars

Incremental Sales	$120,000.00
Collection Cost (5% of Incremental Sales)	$6,000.00	120,000.00 X 5% = $6,000.00
BadDebts (6% of account Receivables)	-$7,200.00	120,000 X 6% = $7200.00
Production and Selling Cist(80% of Incremental Sales)	-$96,000.00	120,000 X 80% = $96000.00

incremental Income Before Taxes	$10,800.00	120,000.00-6000.00-7200.00-96,000 = 10800.00

Taxes@30%of Incremental Income	-$3,240.00	10800.00 X 30% = $3240.00

Incremental Income after Taxes	$7,560.00	Incrremental Income after Taxes