Check Global Services is considering a promotional campaign that will increase annual credit sales by...
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Accounting
Check Global Services is considering a promotional campaign that will increase annual credit sales by $420,000. The company will require investments in accounts receivable, inventory, and plant and equipment. The turnover for each is as follows: Accounts receivable Inventory Plant and equipment 4 times 6 times 2 times All $420,000 of the sales will be collectible. However , collection costs will be 3 percent of sales, and production and selling costs will be 71 percent of sales. The cost to carry inventory will be 5 percent of inventory. Depreciation expense on plant and equipment will be 15 percent of plant and equipment. The tax rate is 25 percent. Check 1 e. Compute the total of all costs from parts b through d. Total costs ebook Compute income after taxes Income after taxes g-1. What is the aftertax rate of return? (Input your answer as a percent rounded to 2 decimal places.) Aftertax rate of retum
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