We Expect That We Can Receive Annual Incremental Income After

Multiple Choice

We expect that we can receive annual incremental income after taxes of $25,000, including an adjustment for uncollectible accounts. What is the maximum commitment to A/R that we should be willing to assume if our firm's minimum required after-tax return is 8%?

A) $36,000
B) $312,500
C) $168,000
D) $180,000