Walter Industries has $5 billion in sales and $1.7 billion in fixed assets. Currently, the companys fixed

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Walter Industries has $5 billion in sales and $1.7 billion in fixed assets. Currently, the company’s fixed assets are operating at 90% of capacity.

a. What level of sales could Walter Industries have obtained if it had been operating at full capacity?

b. What is Walter’s Target fixed assets/Sales ratio?

c. If Walter’s sales increase 12%, how large of an increase in fixed assets will the company need to meet its Target fixed assets/Sales ratio?

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Fundamentals of Financial Management

ISBN: 978-0324664553

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Authors: Eugene F. Brigham, Joel F. Houston

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Question Posted: Oct 05, 2011 09:56 AM

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Walter Industries has $5 billion in sales and $1.7 billion in fixed assets. Currently, the companys fixed

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Sales 5000000000 FA 1700000000 FA are operated at 90 capacity a Full cap...View the full answer

Fundamentals of Financial Management

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