Problem 7-20 Credit policy decision with changing variables (L07-4] 10 Slow Roll Drum Co is evaluating the extension of credit to a new group of customers. Although these customers will provide $450,000 In additional credit sales, 10 percent are likely to be uncollectible. The company will also incur $17.600 in additional collection expense Production and marketing costs represent 78 percent of sales. The firm is in a 25 percent tax bracket. No other asset buildup will be required to service the new customers. The firm has a 8 percent desired return. Assume the average collection period is 90 days a. Compute the return on incremental investment. (Input your answer as a percent rounded to 2 decimal places. Use a 360-day year.) Return on incremental investment b. Should credit be extended to the new group of customers? Yes Activate Windows toW