Price Corp

question 37

Multiple Choice

Price Corp. is considering selling to a group of new customers and creating new annual sales of $90,000. Five percent will be uncollectible. The collection cost on all accounts is 3% of new sales, the cost of producing and selling is 80% of sales, and the firm is in the 21% tax bracket. What is the profit on new sales?

• A) $8,532
• B) $9,660
• C) $7,245
• D) $10,710

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