Lyman Company Has the Opportunity to Increase Annual Credit Sales

question 31

Multiple Choice

Lyman Company has the opportunity to increase annual credit sales $100,000 by selling to a new, riskier group of customers. The expenses of collecting credit sales are expected to be 15 percent of credit sales. The company's manufacturing and selling expenses are projected at 70% of sales, and its effective income tax rate is 40%. If Lyman accepts this sales opportunity, its after-tax profits would increase by an estimated:

• A) $9,000.
• B) $10,000.
• C) $10,200.
• D) $14,400.
• E) Some amount other than these choices.

---

Definitions:

Procedural Learning

The process of learning how to perform activities or tasks that involve a series of steps or actions.

Training Transfer

The successful application of skills, knowledge, or competencies acquired in a training setting to the job environment.

Kirkpatrick's Model

Kirkpatrick's Model is a widely used framework for evaluating the impact of training programs, comprising four levels: reaction, learning, behavior, and results.

Return On Investment

A measure used to evaluate the efficiency or profitability of an investment, calculated by dividing the benefit (return) of an investment by the cost of the investment.