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Unformatted text preview: the new, incremental sales. The firm can raise additional funds for investment in receivables at a nominal annual rate of 10 percent. 6. If you implicitly include the cost of interest on the firm's incremental investment in receivables, then what is the expected change in after-tax profit (net income) if this change in credit policy is made? A. $28.98 B. $34.86 C. $37.10 D. $40.32 E. $41.16 7. What would the interest rate on the incremental investment in accounts receivable have to be for this change in credit policy to produce an incremental change in after-tax profit (net income) of exactly zero? A. 16.09% B. 17.09% C. 18.09% D. 19.09% E. 10.09% YOU ARE GIVEN THE FOLLOWING INFORMATION FOR PROBLEMS 8 - 9:...
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- Spring '08