Sales Intelligence Indicates That an Increase in the Company's Average

Multiple Choice

Sales intelligence indicates that an increase in the company's average collection period from 32 days to 42 days will increase annual sales revenue by 12% from $9,855,000. All sales are on credit. The company's cost of capital is 9%, its cost of goods sold is 60% of revenue and fixed costs are $2,463,000. After consideration for incremental financing costs, how much of an increase in net profit would the company would achieve?

A) $9,331
B) $49,434
C) $102,680
D) $436,493
E) $463,709